Artificial Intelligence

Micron Technology, Inc. Reports Results for the Third Quarter of Fiscal 2022

Published

2 years ago

June 30, 2022

BOISE, Idaho, June 30, 2022 (GLOBE NEWSWIRE) — Micron Technology, Inc. (Nasdaq: MU) today announced results for its third quarter of fiscal 2022, which ended June 2, 2022.

Fiscal Q3 2022 highlights

Revenue of $8.64 billion versus $7.79 billion for the prior quarter and $7.42 billion for the same period last year
GAAP net income of $2.63 billion, or $2.34 per diluted share
Non-GAAP net income of $2.94 billion, or $2.59 per diluted share
Operating cash flow of $3.84 billion versus $3.63 billion for the prior quarter and $3.56 billion for the same period last year

“Micron delivered record revenue in the fiscal third quarter driven by our team’s excellent execution across technology, products and manufacturing,” said Micron Technology President and CEO Sanjay Mehrotra. “Recently, the industry demand environment has weakened, and we are taking action to moderate our supply growth in fiscal 2023. We are confident about the long-term secular demand for memory and storage and are well positioned to deliver strong cross-cycle financial performance.”

Quarterly Financial Results
	GAAP⁽¹⁾									Non-GAAP⁽²⁾
(in millions, except per share amounts)	FQ3-22			FQ2-22			FQ3-21			FQ3-22			FQ2-22			FQ3-21

Revenue	$	8,642		$	7,786		$	7,422		$	8,642		$	7,786		$	7,422
Gross margin		4,035			3,676			3,126			4,097			3,724			3,185
percent of revenue		46.7	%		47.2	%		42.1	%		47.4	%		47.8	%		42.9	%
Operating expenses		1,031			1,130			1,327			953			974			821
Operating income		3,004			2,546			1,799			3,144			2,750			2,364
percent of revenue		34.8	%		32.7	%		24.2	%		36.4	%		35.3	%		31.9	%
Net income		2,626			2,263			1,735			2,939			2,444			2,173
Diluted earnings per share		2.34			2.00			1.52			2.59			2.14			1.88

Investments in capital expenditures, net⁽²⁾ were $2.53 billion for the third quarter of 2022, which resulted in adjusted free cash flow⁽²⁾ of $1.31 billion. Micron repurchased approximately 13.8 million shares of its common stock for $981 million during the third quarter of fiscal 2022 and ended the quarter with cash, marketable investments, and restricted cash of $11.98 billion, for a net cash⁽²⁾ position of $5.01 billion.

On June 30, 2022, our Board of Directors declared a quarterly dividend of $0.115 per share, payable in cash on July 26, 2022, to shareholders of record as of the close of business on July 11, 2022.

Business Outlook

The following table presents Micron’s guidance for the fourth quarter of 2022:

FQ4-22	GAAP⁽¹⁾ Outlook	Non-GAAP⁽²⁾ Outlook

Revenue	$7.2 billion ± $400 million	$7.2 billion ± $400 million
Gross margin	41.5% ± 1.5%	42.5% ± 1.5%
Operating expenses	$1.13 billion ± $25 million	$1.05 billion ± $25 million
Diluted earnings per share	$1.52 ± $0.20	$1.63 ± $0.20

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 Thursday, June 30, 2022 at 2:30 p.m. Mountain time to discuss its third quarter financial results and provide forward-looking guidance for its fourth 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.

© 2022 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, demand for our products, 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, specifically 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, net cash, 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)

	3rd Qtr.			2nd Qtr.			3rd Qtr.			Nine months ended
	June 2, 2022			March 3, 2022			June 3, 2021			June 2, 2022			June 3, 2021

Revenue	$	8,642		$	7,786		$	7,422		$	24,115		$	19,431
Cost of goods sold		4,607			4,110			4,296			12,839			12,920
Gross margin		4,035			3,676			3,126			11,276			6,511

Research and development		773			792			670			2,277			1,958
Selling, general, and administrative		264			263			230			786			658
Restructure and asset impairments		—			5			453			43			466
Other operating (income) expense, net		(6	)		70			(26	)		(11	)		101
Operating income		3,004			2,546			1,799			8,181			3,328

Interest income		20			12			8			42			28
Interest expense		(44	)		(55	)		(46	)		(144	)		(136	)
Other non-operating income (expense), net		8			6			45			(61	)		62
		2,988			2,509			1,806			8,018			3,282

Income tax (provision) benefit		(358	)		(255	)		(65	)		(832	)		(164	)
Equity in net income (loss) of equity method investees		(4	)		9			(6	)		9			23
Net income	$	2,626		$	2,263		$	1,735		$	7,195		$	3,141

Earnings per share
Basic	$	2.36		$	2.02		$	1.55		$	6.44		$	2.81
Diluted		2.34			2.00			1.52			6.38			2.75

Number of shares used in per share calculations
Basic		1,112			1,119			1,121			1,117			1,119
Diluted		1,121			1,130			1,145			1,127			1,141

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

As of	June 2, 2022			March 3, 2022			September 2, 2021

Assets
Cash and equivalents	$	9,157		$	9,116		$	7,763
Short-term investments		1,070			1,006			870
Receivables		6,229			5,384			5,311
Inventories		5,629			5,383			4,487
Assets held for sale		15			13			974
Other current assets		608			600			502
Total current assets		22,708			21,502			19,907
Long-term marketable investments		1,646			1,717			1,765
Property, plant, and equipment		36,665			36,171			33,213
Operating lease right-of-use assets		690			587			551
Intangible assets		415			414			349
Deferred tax assets		682			762			782
Goodwill		1,228			1,228			1,228
Other noncurrent assets		1,262			1,315			1,054
Total assets	$	65,296		$	63,696		$	58,849

Liabilities and equity
Accounts payable and accrued expenses	$	5,788		$	5,650		$	5,325
Current debt		107			123			155
Other current liabilities		1,114			1,145			944
Total current liabilities		7,009			6,918			6,424
Long-term debt		6,856			6,953			6,621
Noncurrent operating lease liabilities		629			535			504
Noncurrent unearned government incentives		663			704			808
Other noncurrent liabilities		858			741			559
Total liabilities		16,015			15,851			14,916

Commitments and contingencies

Shareholders’ equity
Common stock		122			122			122
Additional capital		9,950			9,816			9,453
Retained earnings		45,916			43,407			39,051
Treasury stock		(6,343	)		(5,362	)		(4,695	)
Accumulated other comprehensive income (loss)		(364	)		(138	)		2
Total equity		49,281			47,845			43,933
Total liabilities and equity	$	65,296		$	63,696		$	58,849

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

Nine months ended	June 2, 2022			June 3, 2021

Cash flows from operating activities
Net income	$	7,195		$	3,141
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation expense and amortization of intangible assets		5,234			4,593
Stock-based compensation		378			285
(Gain) loss on debt repurchases and conversions		83			1
Restructure and asset impairments		43			446
Change in operating assets and liabilities
Receivables		(906	)		(340	)
Inventories		(1,146	)		814
Accounts payable and accrued expenses		382			(309	)
Other		141			(47	)
Net cash provided by operating activities		11,404			8,584

Cash flows from investing activities
Expenditures for property, plant, and equipment		(8,454	)		(8,015	)
Purchases of available-for-sale securities		(1,359	)		(1,919	)
Proceeds from sale of Lehi, Utah fab		888			—
Proceeds from maturities of available-for-sale securities		964			1,024
Proceeds from sales of available-for-sale securities		258			473
Proceeds from government incentives		104			335
Other		(162	)		47
Net cash provided by (used for) investing activities		(7,761	)		(8,055	)

Cash flows from financing activities
Repayments of debt		(2,008	)		(1,344	)
Repurchases of common stock – repurchase program		(1,648	)		(150	)
Payments of dividends to shareholders		(335	)		—
Payments on equipment purchase contracts		(132	)		(139	)
Repurchases of common stock – withholdings on employee equity awards		(116	)		(84	)
Proceeds from issuance of debt		2,000			1,188
Other		99			92
Net cash provided by (used for) financing activities		(2,140	)		(437	)

Effect of changes in currency exchange rates on cash, cash equivalents, and restricted cash		(71	)		44

Net increase (decrease) in cash, cash equivalents, and restricted cash		1,432			136
Cash, cash equivalents, and restricted cash at beginning of period		7,829			7,690
Cash, cash equivalents, and restricted cash at end of period	$	9,261		$	7,826

MICRON TECHNOLOGY, INC.
NOTES
(Unaudited)

Lehi, Utah Fab and 3D XPoint

In the second quarter of 2021, we updated our portfolio strategy to further strengthen our focus on memory and storage innovations for the data center market. In connection therewith, we determined that there was insufficient market validation to justify the ongoing investments required to commercialize 3D XPoint at scale. Accordingly, we ceased development of 3D XPoint technology and engaged in discussions with potential buyers for the sale of our facility located in Lehi that was dedicated to 3D XPoint production. As a result, we classified the property, plant, and equipment as held for sale and ceased depreciating the assets. On June 30, 2021, we announced a definitive agreement to sell our Lehi facility to Texas Instruments Incorporated (“TI”) and closed the sale on October 22, 2021.

In the first quarter of 2022, we received $893 million from TI for the sale of the Lehi facility and disposed of $918 million of net assets, consisting primarily of property, plant, and equipment of $921 million; $55 million of other assets, consisting primarily of a receivable for reimbursement of property taxes, equipment spare parts, and raw materials; and $58 million of liabilities, consisting primarily of a finance lease obligation. As a result of the disposition of the Lehi facility, we recognized a loss of $23 million included in restructure and asset impairments in the first quarter of 2022.

In the third quarter of 2021, we recognized a charge of $435 million included in restructure and asset impairments in connection with the definitive agreement with TI (and a tax benefit of $104 million included in income tax (provision) benefit) to write down the assets held for sale to the expected consideration, net of estimated selling costs. In the second quarter of 2021, we also recognized a charge of $49 million in cost of goods sold to write down 3D XPoint inventory in connection with our decision to cease further development of this technology.

Debt Activity

On November 1, 2021, we issued in a public offering $1.00 billion in principal amount of 2.703% senior notes due 2032 (green bonds), $500 million in principal amount of 3.366% senior notes due 2041, and $500 million in principal amount of 3.477% senior notes due 2051, and received aggregate net proceeds of $1.99 billion.

On November 17, 2021, we redeemed $1.25 billion in principal amount of our 2.497% senior notes due 2023 and $600 million in principal amount of our 4.640% senior notes due 2024 for $1.93 billion in cash and recognized a non-operating loss of $83 million.

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

	3rd Qtr.			2nd Qtr.			3rd Qtr.
	June 2, 2022			March 3, 2022			June 3, 2021

GAAP gross margin	$	4,035		$	3,676		$	3,126
Stock-based compensation		57			44			45
Other		5			4			14
Non-GAAP gross margin	$	4,097		$	3,724		$	3,185

GAAP operating expenses	$	1,031		$	1,130		$	1,327
Stock-based compensation		(78	)		(75	)		(53	)
Restructure and asset impairments		—			(5	)		(453	)
Other		—			(76	)		—
Non-GAAP operating expenses	$	953		$	974		$	821

GAAP operating income	$	3,004		$	2,546		$	1,799
Stock-based compensation		135			119			98
Restructure and asset impairments		—			5			453
Other		5			80			14
Non-GAAP operating income	$	3,144		$	2,750		$	2,364

GAAP net income	$	2,626		$	2,263		$	1,735
Stock-based compensation		135			119			98
Restructure and asset impairments		—			5			453
Amortization of debt discount and other costs		8			8			7
Other		5			80			15
Impact of Idaho income tax reform		189			—			—
Estimated tax effects of above and other tax adjustments		(24	)		(31	)		(135	)
Non-GAAP net income	$	2,939		$	2,444		$	2,173

GAAP weighted-average common shares outstanding – Diluted		1,121			1,130			1,145
Adjustment for stock-based compensation		15			13			9
Non-GAAP weighted-average common shares outstanding – Diluted		1,136			1,143			1,154

GAAP diluted earnings per share	$	2.34		$	2.00		$	1.52
Effects of the above adjustments		0.25			0.14			0.36
Non-GAAP diluted earnings per share	$	2.59		$	2.14		$	1.88

RECONCILIATION OF GAAP TO NON-GAAP MEASURES, Continued

	3rd Qtr.			2nd Qtr.			3rd Qtr.
	June 2, 2022			March 3, 2022			June 3, 2021

GAAP net cash provided by operating activities	$	3,838		$	3,628		$	3,560

Expenditures for property, plant, and equipment		(2,578	)		(2,611	)		(2,259	)
Proceeds from sales of property, plant, and equipment		39			27			74
Payments on equipment purchase contracts		(27	)		(27	)		(16	)
Amounts funded by partners		38			11			159
Investments in capital expenditures, net		(2,528	)		(2,600	)		(2,042	)
Adjusted free cash flow	$	1,310		$	1,028		$	1,518

As of	June 2, 2022			March 3, 2022			September 2, 2021

Cash and short-term investments	$	10,227		$	10,122		$	8,633
Current and noncurrent restricted cash		104			108			66
Long-term marketable investments		1,646			1,717			1,765
Current and long-term debt		(6,963	)		(7,076	)		(6,776	)
Net cash	$	5,014		$	4,871		$	3,688

The tables above reconcile GAAP to non-GAAP measures of gross margin, operating expenses, operating income, net income, diluted shares, diluted earnings per share, adjusted free cash flow, and net cash. 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;
Flow-through of business acquisition-related inventory adjustments;
Acquisition-related costs;
Employee severance;
Gains and losses from settlements and patent license charges;
Restructure and asset impairments;
Amortization of debt discount and other costs;
Gains and losses from debt repurchases and conversions;
Gains and losses from business acquisition activities; 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.

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

FQ4-22	GAAP Outlook	Adjustments			Non-GAAP Outlook

Revenue	$7.2 billion ± $400 million		—		$7.2 billion ± $400 million
Gross margin	41.5% ± 1.5%		1%	A	42.5% ± 1.5%
Operating expenses	$1.13 billion ± $25 million	$83 million		B	$1.05 billion ± $25 million
Diluted earnings per share⁽¹⁾	$1.52 ± $0.20	$0.11		A, B, C	$1.63 ± $0.20

Non-GAAP Adjustments (in millions)

A	Stock-based compensation – cost of goods sold	$	45
A	Other – cost of goods sold		4
B	Stock-based compensation – research and development		48
B	Stock-based compensation – sales, general, and administrative		35
C	Tax effects of the above items and other tax adjustments		(9	)
		$	123

⁽¹⁾GAAP earnings per share based on approximately 1.12 billion diluted shares and non-GAAP earnings per share based on approximately 1.13 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, 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.

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Artificial Intelligence

Cybersecurity veteran Simon Church Joins CyXcel as Chief Strategy Officer

Published

28 mins ago

May 9, 2024

CISION (PR Newswire)

cybersecurity-veteran-simon-church-joins-cyxcel-as-chief-strategy-officer

LONDON, May 9, 2024 /PRNewswire/ — CyXcel, a leading cybersecurity business with operations in the UK and North America, announces the appointment of Simon Church as Chief Strategy Officer. A 35-year veteran of the technology industry, Church brings a wealth of cyber expertise and commercial development to the role. Church’s appointment solidifies CyXcel as a pioneering force in combining security, regulatory, and legal expertise for established companies and those expanding into new markets, ensuring protection and recovery of their critical business assets.

As Chief Strategy Officer, Church will spearhead CyXcel’s strategic initiatives to drive innovation, foster partnerships, and accelerate growth opportunities. His appointment underscores CyXcel’s commitment to fortifying its strategic offering and enhancing its position as a leader at the nexus of risk analysis, response management and incident resolution. His vast experience in go-to-market strategies and M&A will be instrumental in driving CyXcel’s growth and expansion initiatives.
Church has held executive leadership positions at market-leading cybersecurity and technology companies such as Maxive Cyber Security (acquired by Thales), Optiv, Vodafone, NTT Security, Verisign, and NetIQ. His experience includes strategic roles in identity management, networking, and managed services and he brings a strong track record of delivering commercial growth, including leading on commercial acquisitions.
In addition to his role at CyXcel, Church serves as Chair of Xalient, a UK-headquartered converged cyber, identity, and networking managed services company. He is also a Board member and strategic advisor to Redshift, as well as a Board member at beqom. Furthermore, Church serves on the Advisory Board of Glasswall, a UK-based security technology company.
Ed Lewis, CyXcel Co-Founder and Managing Partner commented:
“Simon’s unparalleled expertise and proven track record will be invaluable as we continue to innovate and deliver pioneering solutions to our clients worldwide. With Simon’s strategic leadership, we are poised to achieve new heights in our mission to safeguard enterprises and navigate the complex geopolitical, regulatory and legal implications of ever-evolving cyber threats.”
Simon Church said:
“I’m thrilled to be joining such an experienced and ambitious team and the CyXcel offer is unlike any I’ve ever seen. CyXcel has already established itself as a trusted partner in empowering organisational awareness and responsiveness to the financial, existential, and strategic complexities of global cyber threats. I look forward to delivering rapid growth around the world by developing and executing initiatives that provide unparalleled protection and value to our clients.”
Photo – https://mma.prnewswire.com/media/2407915/Simon_Church.jpg

View original content:https://www.prnewswire.co.uk/news-releases/cybersecurity-veteran-simon-church-joins-cyxcel-as-chief-strategy-officer-302141008.html

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IBM Introduces New Microsoft Copilot Capabilities to Fuel AI-Powered Business Transformation

Published

28 mins ago

May 9, 2024

CISION (PR Newswire)

ibm-introduces-new-microsoft-copilot-capabilities-to-fuel-ai-powered-business-transformation

ARMONK, N.Y., May 9, 2024 /PRNewswire/ — IBM (NYSE: IBM) today announced the availability of IBM Copilot Runway, a new offering from IBM Consulting designed to help enterprises create, customize, deploy and manage copilots including Copilot for Microsoft 365. With the new offering, clients will be able to seamlessly integrate copilots’ generative AI into their organizations in order to enhance productivity and drive business success. IBM Consulting has also formed a dedicated practice of consultants with Microsoft copilot skills, credentials and expertise to guide clients on their AI transformation journey.

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The Procurement and Finance Contract Copilot which assists specialists in extracting valuable insights from contracts.The Customer Service and Field Service Copilot which gives agents and technicians access to self-service options and a time-saving generative AI search.The Employee Experience Copilot which is designed to enhance employee engagement. IBM and Microsoft already serve clients across a variety of industries with a range of AI solutions and services. In fact, IBM Consulting worked with Virgin Money to develop and launch Redi, a conversational virtual assistant that helps credit card customers in the Virgin Money credit card app. Redi, powered by Virgin Money’s suite of Microsoft Copilots, is a testament to the power of partnership.
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IBM Consulting is also scaling its Microsoft copilot capabilities and capacity across its network of Global Innovation Centers on each continent. For example, these capabilities are being used to co-create solutions with clients at IBM Consulting’s new IBM-Microsoft Experience Zone in Bangalore, India – a first of its kind in our collaboration.
At the Experience Zone, clients from around the world and across industries are working together with IBM Consulting in various technology stations to co-ideate and co-create generative AI-powered solutions – leveraging Microsoft technologies, including Copilot. Later this year, IBM Consulting plans to open additional IBM-Microsoft Experience Zones in Romania, U.K. and U.S., where clients in these regions can explore the power of Copilot. In addition IBM and Microsoft hosted a second client-focused hackathon with 800 participants, including clients and experts to build solutions leveraging Microsoft copilot – with winners to be announced this quarter.
“As IBM and Microsoft strengthen our partnership, we’re poised to empower more clients with Microsoft Copilot, supercharging productivity and boosting creativity through the power of generative AI,” said John Granger, Senior Vice President, IBM Consulting. “Our dedicated IBM Consulting Microsoft practice, along with Copilot-focused Experience Zones around the world, help us meet clients where they are and bring them the right generative-AI-enabled solutions for their businesses.”
“Clients need the right partners and technology to scale AI responsibly across the enterprise,” said Dinis Couto, General Manager of Global Partner Solutions for Microsoft. “With IBM’s dedicated group of Microsoft Copilot experts, we’re confident we can help more clients unlock the full potential of generative AI for their businesses.”
IBM purchased Copilot for Microsoft 365 for its practitioners. To continue building on the partnership, IBM has also invested in growing its team of experts and capabilities through acquisitions, like Neudesic and Bluetab.
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Artificial Intelligence

Inceptio-Powered Autonomous Trucks Surpass 100 Million Kilometers in Safe Commercial Operations

Published

28 mins ago

May 9, 2024

CISION (PR Newswire)

Major Milestone Advances Autonomous Heavy-Duty Truck Commercialization
SHANGHAI, May 9, 2024 /PRNewswire/ — Inceptio Technology (“Inceptio,” or the “Company”), an industry leading developer of autonomous driving technologies for heavy-duty trucks, today announced that heavy-duty trucks powered by the Inceptio Autonomous Driving System and its Truck Navigate-on-Autopilot (T-NOA) capabilities have surpassed the significant milestone of 100 million kilometers in safe commercial operations, reinforcing Inceptio’s global leadership in the commercialization of autonomous trucks.

This achievement underscores how L3 and L2+ autonomous heavy-duty trucks have been successfully deployed across the line-haul logistics sector, including express delivery, less-than-truckload (LTL) transportation, as well as contract logistics. This also reflects the significant value that autonomous trucks offer logistics operators.
Accelerating the Adoption of Autonomous Trucks Across the Line-Haul Logistics Sector
Inceptio-powered trucks surpassed 50 million kilometers of safe commercial operations in August 2023. Building on this success, Inceptio rapidly expanded the number of compatible truck models and surpassed the 100-million-kilometer mark by the end of April 2024.
Inceptio’s Autonomous Driving System covers 83% of China’s national highways connecting 7 major economic zones. Over the course of the 100 million kilometers, a total of 1,864 drivers safely used Inceptio-powered L3 and L2+ trucks in their daily operations.
Current customers include all the top logistics companies in China such as ZTO Express (NYSE: ZTO and HKEX: 2057), YTO Express (HKEX: 6123), STO Express (SZSE: 002468), JD Logistics (HKEX: 2618), and SF Express (SHE: 002352). Inceptio has also established an extensive footprint across the contract logistics segment including cold chain, automotive, beverages, and fast-moving consumer goods among many others, serving global brands like Budweiser and Nestlé. Inceptio’s autonomous driving technology caters to a diverse user base—from big logistics companies to small fleets and individual operators.
Inceptio has partnered with several leading Chinese truck manufacturers to pre-load mass produced trucks with the Inceptio Autonomous Driving System. These partnerships have expanded the number of trucks Inceptio powers and include popular models from Dongfeng, Sinotruk, Foton and Liuqi that are available in both 4×2 and 6×4 axle configurations to meet the diverse needs of the line-haul logistics sector.
Paving the Way for Greater Commercialization with Safer, More Efficient, and Profitable Operations
Over the course of 100 million kilometers, Inceptio has demonstrated how its autonomous driving technology and its T-NOA capabilities are paving the way for greater commercial deployment across the line-haul logistics with safer, more efficient, and profitable operations.
The majority of the routes large express delivery companies in China use exceed 500 kilometers in length. Two drivers are commonly assigned to each traditional truck on these routes and take shifts driving in order to minimize fatigue and ensure safety when meeting tight shipping schedules. Inceptio’s solution makes driving much less physically and mentally exhausting as it handles more than 90% of the journey. Express delivery companies have been able to significantly reduce the number of drivers per truck and labor costs on these same routes as a result. On routes ranging from 500 to 1,200 kilometers, Inceptio has realized a direct shift from two drivers per truck to one, resulting in a significant 40% to 50% reduction in labor costs. On routes that exceed 1,200 kilometers where an autonomous truck relay model has been deployed, a traditional assignment of 6-8 drivers per three trucks has been reduced to 5. Likewise, a traditional assignment of 8-10 drivers per 4 trucks has been reduced to 6, resulting in a substantial decrease in labor costs and improved driver satisfaction.
The benefits are equally strong for contract logistic companies, both large and small. Huatai Logistics for example, a contract logistics company specializing in automotive parts transport on routes that average 1,500 kilometers, has seen its driver-to-truck ratio decrease from two to one by using Inceptio-powered trucks. Combined with a reduction of 3-5 liters in fuel consumption per 100 kilometers, total cost of ownership per kilometer decreased by 7-15%. The stellar safety record and enhanced driving comfort offered by autonomous trucks improved fleet-attendance rates significantly and increased monthly kilometers per truck by as much as 10%.
Some individual operators have also seen increases of 10-20% in monthly kilometers per truck and 2,500-5,500 RMB in monthly net income due to the fundamental improvement of safety and driving comfort offered by Inceptio-powered autonomous trucks. The fuel-saving benefits of autonomous trucks are particularly attractive for individual operators.
Leveraging Data Assets to Enhance Inceptio’s Autonomous Driving Technology
Inceptio leverages its powerful, data-driven R&D system to rapidly iterate and enhance its autonomous driving technology. This system, which incorporates accurate and efficient data capturing, automated cloud processing, advanced scenario mining, and automatic annotation, allows Inceptio to continuously refine its industry-leading T-NOA algorithm in real-time. This focus on real-world data is a key driver of Inceptio’s competitive edge in the autonomous driving technology landscape.
Julian Ma, founder and CEO of Inceptio Technology, commented, “Inceptio’s autonomous driving technology and its T-NOA capabilities are making significant progress in their commercialization, allowing us to rapidly surpass the 100-million-kilometer milestone after hitting 50 million kilometers only eight months ago. The impact our technology is having on the logistics industry is profound. The commercial deployment of Inceptio-powered autonomous trucks across the line-haul logistics sector is exciting, but what’s truly inspiring is the creativity and innovation our customers bring to the table. This user-driven approach is pushing the boundaries of how these autonomous trucks are used, opening up new ways to deploy our technology. The more data we gather, the faster we will be able to enhance our algorithms and improve our full-stack solution. We will continue working closely with our truck OEM partners to offer even greater safety, efficiency, and profitability to logistics customers.”
About Inceptio Technology
Inceptio Technology is an industry leading developer of autonomous driving technologies for heavy-duty trucks. Its flagship technology is the Inceptio Autonomous Driving System, a proprietary full-stack solution. Inceptio partnered with leading OEMs to roll out the industry’s first mass-produced L3 autonomous trucks in late 2021. These trucks are operated nationwide in China by customers across the line-haul logistics sector including express delivery, less-than-truckload (LTL) transportation, and contract logistics. Inceptio is at the cutting edge of developing fully driverless trucks. In 2022 it became the first company in China to receive a public road-testing permit for driverless autonomous heavy-duty trucks.
For more information on Inceptio Technology, visit https://en.inceptio.ai/

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