Micron Technology, Inc. Reports Results for the Fourth Quarter and Full Year of Fiscal 2022

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BOISE, Idaho, Sept. 29, 2022 (GLOBE NEWSWIRE) — Micron Technology, Inc. (Nasdaq: MU) today announced results for its fourth quarter and full year of fiscal 2022, which ended September 1, 2022.

Fiscal Q4 2022 highlights

  • Revenue of $6.64 billion versus $8.64 billion for the prior quarter and $8.27 billion for the same period last year
  • GAAP net income of $1.49 billion, or $1.35 per diluted share
  • Non-GAAP net income of $1.62 billion, or $1.45 per diluted share
  • Operating cash flow of $3.78 billion versus $3.84 billion for the prior quarter and $3.88 billion for the same period last year

Fiscal 2022 highlights

  • Revenue of $30.76 billion versus $27.71 billion for the prior year
  • GAAP net income of $8.69 billion, or $7.75 per diluted share
  • Non-GAAP net income of $9.48 billion, or $8.35 per diluted share
  • Operating cash flow of $15.18 billion versus $12.47 billion for the prior year

“In fiscal 2022, Micron generated record revenue of $30.8 billion and delivered our sixth consecutive year of positive free cash flow, allowing us to return a record $2.9 billion to our shareholders,” said Micron Technology President and CEO Sanjay Mehrotra. “Our technology and manufacturing leadership in both DRAM and NAND, deep customer relationships, diverse product portfolio, and strong balance sheet put Micron on solid footing to navigate the weakened near-term supply-demand environment. We are taking decisive steps to reduce our supply growth including a nearly 50% wafer fab equipment capex cut versus last year, and we expect to emerge from this downcycle well positioned to capitalize on the long-term demand for memory and storage.”

Quarterly Financial Results
(in millions, except per share amounts) GAAP(1)   Non-GAAP(2)
FQ4-22 FQ3-22 FQ4-21   FQ4-22 FQ3-22 FQ4-21
               
Revenue $ 6,643   $ 8,642   $ 8,274     $ 6,643   $ 8,642   $ 8,274  
Gross margin   2,622     4,035     3,912       2,676     4,097     3,964  
percent of revenue   39.5 %   46.7 %   47.3 %     40.3 %   47.4 %   47.9 %
Operating expenses   1,101     1,031     957       1,014     953     891  
Operating income   1,521     3,004     2,955       1,662     3,144     3,073  
percent of revenue   22.9 %   34.8 %   35.7 %     25.0 %   36.4 %   37.1 %
Net income   1,492     2,626     2,720       1,621     2,939     2,778  
Diluted earnings per share   1.35     2.34     2.39       1.45     2.59     2.42  
Annual Financial Results
(in millions, except per share amounts) GAAP(1)   Non-GAAP(2)
FY 22 FY 21   FY 22 FY 21
           
Revenue $ 30,758   $ 27,705     $ 30,758   $ 27,705  
Gross margin   13,898     10,423       14,113     10,987  
percent of revenue   45.2 %   37.6 %     45.9 %   39.7 %
Operating expenses   4,196     4,140       3,832     3,320  
Operating income   9,702     6,283       10,281     7,667  
percent of revenue   31.5 %   22.7 %     33.4 %   27.7 %
Net income   8,687     5,861       9,475     6,976  
Diluted earnings per share   7.75     5.14       8.35     6.06  
                           

Investments in capital expenditures, net(2) were $3.58 billion for the fourth quarter of 2022 and $11.98 billion for the full year of 2022, which resulted in adjusted free cash flows(2) of $196 million for the fourth quarter of 2022 and $3.21 billion for the full year of 2022. Micron repurchased approximately 13.2 million shares of its common stock for $784 million during the fourth quarter of 2022 and 35.4 million shares of its common stock for $2.43 billion during the full year of 2022 and ended the year with cash, marketable investments, and restricted cash of $11.06 billion, for a net cash(2) position of $4.15 billion. On September 29, 2022, Micron’s Board of Directors declared a quarterly dividend of $0.115 per share, payable in cash on October 26, 2022, to shareholders of record as of the close of business on October 11, 2022.

Business Outlook

The following table presents Micron’s guidance for the first quarter of 2023:

FQ1-23 GAAP(1) Outlook Non-GAAP(2) Outlook
     
Revenue $4.25 billion ± $250 million $4.25 billion ± $250 million
Gross margin 25.0% ± 2.0% 26.0% ± 2.0%
Operating expenses $1.09 billion ± $25 million $1.00 billion ± $25 million
Diluted earnings (loss) per share ($0.09) ± $0.10 $0.04 ± $0.10
     

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, September 29, 2022 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.

© 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, 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, 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)

  4th Qtr. 3rd Qtr. 4th Qtr. Year Ended
  September 1,
2022
June 2,
2022
September 2,
2021
September 1,
2022
September 2,
2021
           
Revenue $ 6,643   $ 8,642   $ 8,274   $ 30,758   $ 27,705  
Cost of goods sold   4,021     4,607     4,362     16,860     17,282  
Gross margin   2,622     4,035     3,912     13,898     10,423  
           
Research and development   839     773     705     3,116     2,663  
Selling, general, and administrative   280     264     236     1,066     894  
Restructure and asset impairments   5         22     48     488  
Other operating (income) expense, net   (23 )   (6 )   (6 )   (34 )   95  
Operating income   1,521     3,004     2,955     9,702     6,283  
           
Interest income   54     20     9     96     37  
Interest expense   (45 )   (44 )   (47 )   (189 )   (183 )
Other non-operating income (expense), net   23     8     19     (38 )   81  
    1,553     2,988     2,936     9,571     6,218  
           
Income tax (provision) benefit   (56 )   (358 )   (230 )   (888 )   (394 )
Equity in net income (loss) of equity method investees   (5 )   (4 )   14     4     37  
Net income $ 1,492   $ 2,626   $ 2,720   $ 8,687   $ 5,861  
           
Earnings per share          
Basic $ 1.36   $ 2.36   $ 2.42   $ 7.81   $ 5.23  
Diluted   1.35     2.34     2.39     7.75     5.14  
           
Number of shares used in per share calculations          
Basic   1,097     1,112     1,123     1,112     1,120  
Diluted   1,106     1,121     1,138     1,122     1,141  

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

As of September 1,
2022
June 2,
2022
September 2,
2021
       
Assets      
Cash and equivalents $ 8,262   $ 9,157   $ 7,763  
Short-term investments   1,069     1,070     870  
Receivables   5,130     6,229     5,311  
Inventories   6,663     5,629     4,487  
Assets held for sale   13     15     974  
Other current assets   644     608     502  
Total current assets   21,781     22,708     19,907  
Long-term marketable investments   1,647     1,646     1,765  
Property, plant, and equipment   38,549     36,665     33,213  
Operating lease right-of-use assets   678     690     551  
Intangible assets   421     415     349  
Deferred tax assets   702     682     782  
Goodwill   1,228     1,228     1,228  
Other noncurrent assets   1,277     1,262     1,054  
Total assets $ 66,283   $ 65,296   $ 58,849  
       
Liabilities and equity      
Accounts payable and accrued expenses $ 6,090   $ 5,788   $ 5,325  
Current debt   103     107     155  
Other current liabilities   1,346     1,114     944  
Total current liabilities   7,539     7,009     6,424  
Long-term debt   6,803     6,856     6,621  
Noncurrent operating lease liabilities   610     629     504  
Noncurrent unearned government incentives   589     663     808  
Other noncurrent liabilities   835     858     559  
Total liabilities   16,376     16,015     14,916  
       
Commitments and contingencies      
       
Shareholders’ equity      
Common stock   123     122     122  
Additional capital   10,197     9,950     9,453  
Retained earnings   47,274     45,916     39,051  
Treasury stock   (7,127 )   (6,343 )   (4,695 )
Accumulated other comprehensive income (loss)   (560 )   (364 )   2  
Total equity   49,907     49,281     43,933  
Total liabilities and equity $ 66,283   $ 65,296   $ 58,849  
       

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

For the year ended September 1,
2022
September 2,
2021
     
Cash flows from operating activities    
Net income $ 8,687   $ 5,861  
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation expense and amortization of intangible assets   7,116     6,214  
Stock-based compensation   514     378  
(Gain) loss on debt repurchases and conversions   83     1  
Restructure and asset impairment   44     454  
Change in operating assets and liabilities:    
Receivables   190     (1,446 )
Inventories   (2,179 )   866  
Accounts payable and accrued expenses   744     210  
Other   (18 )   (70 )
Net cash provided by operating activities   15,181     12,468  
     
Cash flows from investing activities    
Expenditures for property, plant, and equipment   (12,067 )   (10,030 )
Purchases of available-for-sale securities   (1,770 )   (3,163 )
Proceeds from maturities of available-for-sale securities   1,321     1,250  
Proceeds from sale of Lehi, Utah fab   888      
Proceeds from sales of available-for-sale securities   294     856  
Proceeds from government incentives   115     495  
Other   (366 )   3  
Net cash provided by (used for) investing activities   (11,585 )   (10,589 )
     
Cash flows from financing activities    
Repurchases of common stock – repurchase program   (2,432 )   (1,200 )
Repayments of debt   (2,032 )   (1,520 )
Payments of dividends to shareholders   (461 )    
Payments on equipment purchase contracts   (141 )   (295 )
Repurchases of common stock – withholdings on employee equity awards   (125 )   (94 )
Proceeds from issuance of debt   2,000     1,188  
Other   211     140  
Net cash provided by (used for) financing activities   (2,980 )   (1,781 )
     
Effect of changes in currency exchange rates on cash, cash equivalents, and restricted cash   (106 )   41  
     
Net increase (decrease) in cash, cash equivalents, and restricted cash   510     139  
Cash, cash equivalents, and restricted cash at beginning of period   7,829     7,690  
Cash, cash equivalents, and restricted cash at end of period $ 8,339   $ 7,829  

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, Utah that was dedicated to 3D XPoint production. As a result, we classified the property, plant, and equipment as held for sale as of the second quarter of 2021 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 and other related adjustments, we recognized a loss of $23 million included in restructure and asset impairments in the first quarter of 2022.

In 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. The impairment charge was based on Level 3 inputs including expected consideration and the composition of assets included in the sale, which were derived from the agreement with TI. We also recognized a charge of $49 million to cost of goods sold in 2021 to write down 3D XPoint inventory due to our decision to cease further development of this technology. Our 3D XPoint technology development and Lehi facility operations were primarily included in our CNBU segment results.

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)

  4th Qtr. 3rd Qtr. 4th Qtr. Year Ended
  September 1,
2022
June 2,
2022
September 2,
2021
September 1,
2022
September 2,
2021
           
GAAP gross margin $ 2,622   $ 4,035   $ 3,912   $ 13,898   $ 10,423  
Stock-based compensation   49     57     43     193     186  
Inventory accounting policy change to FIFO                   133  
Change in inventory cost absorption                   160  
3D XPoint inventory write-down                   49  
Other   5     5     9     22     36  
Non-GAAP gross margin $ 2,676   $ 4,097   $ 3,964   $ 14,113   $ 10,987  
           
GAAP operating expenses $ 1,101   $ 1,031   $ 957   $ 4,196   $ 4,140  
Stock-based compensation   (82 )   (78 )   (50 )   (308 )   (209 )
Restructure and asset impairments   (5 )       (22 )   (48 )   (488 )
Patent license charges                   (128 )
Other           6     (8 )   5  
Non-GAAP operating expenses $ 1,014   $ 953   $ 891   $ 3,832   $ 3,320  
           
GAAP operating income $ 1,521   $ 3,004   $ 2,955   $ 9,702   $ 6,283  
Stock-based compensation   131     135     93     501     395  
Inventory accounting policy change to FIFO                   133  
Change in inventory cost absorption                   160  
3D XPoint inventory write-down                   49  
Restructure and asset impairments   5         22     48     488  
Patent license charges                   128  
Other   5     5     3     30     31  
Non-GAAP operating income $ 1,662   $ 3,144   $ 3,073   $ 10,281   $ 7,667  
           
GAAP net income $ 1,492   $ 2,626   $ 2,720   $ 8,687   $ 5,861  
Stock-based compensation   131     135     93     501     395  
Inventory accounting policy change to FIFO                   133  
Change in inventory cost absorption                   160  
3D XPoint inventory write-down                   49  
Restructure and asset impairments   5         22     48     488  
Patent license charges                   128  
Amortization of debt discount   6     8     8     31     30  
(Gain) loss on debt repurchases and conversions               83     1  
Other   5     5     3     30     31  
Impact of Idaho income tax reform       189         189      
Estimated tax effects of above and other tax adjustments   (18 )   (24 )   (68 )   (94 )   (300 )
Non-GAAP net income $ 1,621   $ 2,939   $ 2,778   $ 9,475   $ 6,976  
           
GAAP weighted-average common shares outstanding – Diluted   1,106     1,121     1,138     1,122     1,141  
Adjustment for stock-based compensation   15     15     9     13     10  
Non-GAAP weighted-average common shares outstanding – Diluted   1,121     1,136     1,147     1,135     1,151  
           
GAAP diluted earnings per share $ 1.35   $ 2.34   $ 2.39   $ 7.75   $ 5.14  
Effects of the above adjustments   0.10     0.25     0.03     0.60     0.92  
Non-GAAP diluted earnings per share $ 1.45   $ 2.59   $ 2.42   $ 8.35   $ 6.06  

RECONCILIATION OF GAAP TO NON-GAAP MEASURES, Continued

  4th Qtr. 3rd Qtr. 4th Qtr. Year Ended
  September 1,
2022
June 2,
2022
September 2,
2021
September 1,
2022
September 2,
2021
           
GAAP net cash provided by operating activities $ 3,777   $ 3,838   $ 3,884   $ 15,181   $ 12,468  
           
Expenditures for property, plant, and equipment   (3,613 )   (2,578 )   (2,015 )   (12,067 )   (10,030 )
Proceeds from sales of property, plant, and equipment   30     39     4     117     108  
Payments on equipment purchase contracts   (9 )   (27 )   (156 )   (141 )   (295 )
Amounts funded by partners   11     38     160     115     502  
Investments in capital expenditures, net   (3,581 )   (2,528 )   (2,007 )   (11,976 )   (9,715 )
Adjusted free cash flow $ 196   $ 1,310   $ 1,877   $ 3,205   $ 2,753  
As of September 1,
2022
June 2,
2022
September 2,
2021
       
Cash and short-term investments $ 9,331   $ 10,227   $ 8,633  
Current and noncurrent restricted cash   77     104     66  
Long-term marketable investments   1,647     1,646     1,765  
Current and long-term debt   (6,906 )   (6,963 )   (6,776 )
Net cash $ 4,149   $ 5,014   $ 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;
  • Gains and losses from debt repurchases and conversions;
  • Gains and losses from business acquisition activities;
  • Initial impact of inventory accounting policy change to FIFO and change in inventory cost absorption in the second quarter of 2021; 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

FQ1-23   GAAP Outlook   Adjustments   Non-GAAP Outlook
               
Revenue $4.25 billion ± $250 million           $4.25 billion ± $250 million
Gross margin 25.0% ± 2.0%     1%   A   26.0% ± 2.0%
Operating expenses $1.09 billion ± $25 million   $91 million   B   $1.00 billion ± $25 million
Diluted earnings (loss) per share(1) ($0.09) ± $0.10     $0.13   A, B, C   $0.04 ± $0.10
Non-GAAP Adjustments
(in millions)
           
               
A Stock-based compensation – cost of goods sold   $         33        
A Other – cost of goods sold             3        
B Stock-based compensation – research and development             52        
B Stock-based compensation – sales, general, and administrative             39        
C Tax effects of the above items and other tax adjustments             14        
              $         141        
   
(1) GAAP earnings per share based on approximately 1.10 billion diluted shares and non-GAAP earnings per share based on approximately 1.12 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.