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Micron Beats on Q3 Earnings: Will Strong Guidance Uplift the Stock?
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Key Takeaways
MU Q3 EPS of $1.91 beat estimates by 20% and rose 208% year over year on strong DRAM and HBM demand.
Q3 revenues hit $9.3B, up 37% YoY, with record data center DRAM and solid NAND performance.
MU guided Q4 revenues and EPS well above consensus, projecting $10.7B in sales and $2.50 in earnings.
Micron Technology (MU - Free Report) reported third-quarter fiscal 2025 earnings of $1.91 per share, beating the Zacks Consensus Estimate by 20.13%. MU’s third-quarter earnings jumped 208.1% year over year from the year-ago quarter’s earnings of 62 cents.
Micron’s revenues increased 37% year over year to $9.30 billion and beat the Zacks Consensus Estimate by 5.3%. The top line was driven by robust demand for its high bandwidth memory (HBM) products.
Buoyed by better-than-expected financial performance, Micron issued strong guidance for the fourth quarter. Micron’s forecast for the top and bottom lines was above the Zacks Consensus Estimate.
The company’s overwhelming third-quarter results, along with upbeat guidance for the fourth quarter, are likely to boost its share price. Year to date, MU stock has soared 56.8%, outperforming the Zacks Computer and Technology sector’s growth of 4%.
Micron Technology, Inc. Price, Consensus and EPS Surprise
Technology-wise, DRAM revenues of $7.1 billion, accounting for 76% of the total revenues in the fiscal third quarter, increased 51% year over year and 15% sequentially. The company experienced record demand for data center DRAM, driven by strong growth in HBM and robust performance of high-capacity DIMMs and low-power server DRAM products.
NAND revenues of $2.2 billion, representing 23% of the total revenues, were up 4% year over year and 16% quarter over quarter.
Other revenues were $75 million in the reported quarter, which increased from $54 million in the year-ago quarter and remained flat sequentially.
Business segment-wise, revenues of $5.1 billion from the Compute and Networking Business Unit soared 96.2% from the year-ago quarter and 11% sequentially, driven by a more than 50% sequential increase in HBM revenues.
Revenues of $1.6 billion from the Mobile Business Unit remained flat on a year-over-year basis and increased 45% on a quarter-over-quarter basis due to reduced customer inventories and strong demand from DRAM content growth.
The Embedded Business Unit’s revenues were $1.2 billion, down 7.7% from the year-ago period but up 20% from the previous quarter. Revenues from the Storage Business Unit, comprising solid-state drive NAND components, totaled $1.5 billion, which increased 7.1% year over year and 4% sequentially.
MU’s Q3 Operating Details
For the fiscal third quarter, MU posted a non-GAAP gross profit of $3.62 billion, representing a robust improvement from the year-ago quarter’s $1.92 billion. Also, Micron’s non-GAAP gross profit increased 18.7% sequentially.
The fiscal third-quarter non-GAAP gross margin of 39% improved from the year-ago quarter’s 28.1.%. The non-GAAP gross margin increased 110 basis points from the previous quarter’s 37.9%.
Non-GAAP operating expenses were $1.133 billion compared with the previous quarter’s $1.046 billion and the year-ago quarter’s $976 million.
Micron’s non-GAAP operating income of $2.49 billion was higher than the previous quarter’s non-GAAP operating income of $2.01 billion. It also shows significant improvements from the year-ago quarter’s non-GAAP operating income of $941 million.
The non-GAAP operating margin came in at 26.8%. Micron posted a non-GAAP operating margin of 24.9% for the previous quarter, and it had a non-GAAP operating margin of 13.8% in the year-ago quarter.
Micron’s Balance Sheet & Cash Flow
MU exited the reported quarter with cash and investments of $10.81 billion compared with $8.22 billion at the end of the prior quarter. It ended the quarter with total liquidity of $15.7 billion, up from the previous quarter’s $12.1 billion.
Micron’s total debt, as of May 29, 2025, was $15.5 billion compared with the $14.4 billion witnessed at the end of the previous quarter.
The company generated an operating cash flow of $4.61 billion in the fiscal third quarter. It spent $2.7 billion on capital expenditure in the quarter, resulting in an adjusted free cash flow of $1.95 billion. MU paid out $392 million in dividends but repurchased no shares in the third quarter of fiscal 2025.
MU’s Q4 Outlook
Micron provided its guidance for the fourth quarter of fiscal 2025. The company anticipates revenues of $10.7 billion (+/-$300 million) in the fiscal fourth quarter. The Zacks Consensus Estimate is pinned at $9.90 billion.
For the fiscal fourth quarter, MU projects a non-GAAP gross margin of 42% (+/-100 basis points). Operating expenses on a non-GAAP basis are estimated to be $1.2 billion (+/-$20 million).
Adjusted EPS is anticipated to be $2.50 (+/- 15 cents). The consensus mark is pegged at a loss of $2.02 per share. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
The Zacks Consensus Estimate for Paycom Software’s 2025 earnings has been revised downward by a cent to $8.95 per share over the past 30 days, indicating a 9.01% year-over-year increase. Paycom Software’s shares have gained 9.1%, year to date.
The consensus mark for Paylocity Holding’s 2025 earnings has been revised upward by a cent to $7.02 per share over the past 30 days, indicating a 6.85% year-over-year increase. Paylocity Holding’s shares have declined 12%, year to date.
The Zacks Consensus Estimate for Qualys’ 2025 earnings has been revised upward by four cents to $6.17 per share over the past 30 days, indicating a 0.65% year-over-year increase. Qualys’s shares have gained 0.7%, year to date.
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Micron Beats on Q3 Earnings: Will Strong Guidance Uplift the Stock?
Key Takeaways
Micron Technology (MU - Free Report) reported third-quarter fiscal 2025 earnings of $1.91 per share, beating the Zacks Consensus Estimate by 20.13%. MU’s third-quarter earnings jumped 208.1% year over year from the year-ago quarter’s earnings of 62 cents.
Micron’s revenues increased 37% year over year to $9.30 billion and beat the Zacks Consensus Estimate by 5.3%. The top line was driven by robust demand for its high bandwidth memory (HBM) products.
Buoyed by better-than-expected financial performance, Micron issued strong guidance for the fourth quarter. Micron’s forecast for the top and bottom lines was above the Zacks Consensus Estimate.
The company’s overwhelming third-quarter results, along with upbeat guidance for the fourth quarter, are likely to boost its share price. Year to date, MU stock has soared 56.8%, outperforming the Zacks Computer and Technology sector’s growth of 4%.
Micron Technology, Inc. Price, Consensus and EPS Surprise
Micron Technology, Inc. price-consensus-eps-surprise-chart | Micron Technology, Inc. Quote
Micron’s Q3 Top-Line Details
Technology-wise, DRAM revenues of $7.1 billion, accounting for 76% of the total revenues in the fiscal third quarter, increased 51% year over year and 15% sequentially. The company experienced record demand for data center DRAM, driven by strong growth in HBM and robust performance of high-capacity DIMMs and low-power server DRAM products.
NAND revenues of $2.2 billion, representing 23% of the total revenues, were up 4% year over year and 16% quarter over quarter.
Other revenues were $75 million in the reported quarter, which increased from $54 million in the year-ago quarter and remained flat sequentially.
Business segment-wise, revenues of $5.1 billion from the Compute and Networking Business Unit soared 96.2% from the year-ago quarter and 11% sequentially, driven by a more than 50% sequential increase in HBM revenues.
Revenues of $1.6 billion from the Mobile Business Unit remained flat on a year-over-year basis and increased 45% on a quarter-over-quarter basis due to reduced customer inventories and strong demand from DRAM content growth.
The Embedded Business Unit’s revenues were $1.2 billion, down 7.7% from the year-ago period but up 20% from the previous quarter. Revenues from the Storage Business Unit, comprising solid-state drive NAND components, totaled $1.5 billion, which increased 7.1% year over year and 4% sequentially.
MU’s Q3 Operating Details
For the fiscal third quarter, MU posted a non-GAAP gross profit of $3.62 billion, representing a robust improvement from the year-ago quarter’s $1.92 billion. Also, Micron’s non-GAAP gross profit increased 18.7% sequentially.
The fiscal third-quarter non-GAAP gross margin of 39% improved from the year-ago quarter’s 28.1.%. The non-GAAP gross margin increased 110 basis points from the previous quarter’s 37.9%.
Non-GAAP operating expenses were $1.133 billion compared with the previous quarter’s $1.046 billion and the year-ago quarter’s $976 million.
Micron’s non-GAAP operating income of $2.49 billion was higher than the previous quarter’s non-GAAP operating income of $2.01 billion. It also shows significant improvements from the year-ago quarter’s non-GAAP operating income of $941 million.
The non-GAAP operating margin came in at 26.8%. Micron posted a non-GAAP operating margin of 24.9% for the previous quarter, and it had a non-GAAP operating margin of 13.8% in the year-ago quarter.
Micron’s Balance Sheet & Cash Flow
MU exited the reported quarter with cash and investments of $10.81 billion compared with $8.22 billion at the end of the prior quarter. It ended the quarter with total liquidity of $15.7 billion, up from the previous quarter’s $12.1 billion.
Micron’s total debt, as of May 29, 2025, was $15.5 billion compared with the $14.4 billion witnessed at the end of the previous quarter.
The company generated an operating cash flow of $4.61 billion in the fiscal third quarter. It spent $2.7 billion on capital expenditure in the quarter, resulting in an adjusted free cash flow of $1.95 billion. MU paid out $392 million in dividends but repurchased no shares in the third quarter of fiscal 2025.
MU’s Q4 Outlook
Micron provided its guidance for the fourth quarter of fiscal 2025. The company anticipates revenues of $10.7 billion (+/-$300 million) in the fiscal fourth quarter. The Zacks Consensus Estimate is pinned at $9.90 billion.
For the fiscal fourth quarter, MU projects a non-GAAP gross margin of 42% (+/-100 basis points). Operating expenses on a non-GAAP basis are estimated to be $1.2 billion (+/-$20 million).
Adjusted EPS is anticipated to be $2.50 (+/- 15 cents). The consensus mark is pegged at a loss of $2.02 per share. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Zacks Rank & Stocks to Consider
Currently, MU carries a Zacks Rank #3 (Hold).
Paycom Software (PAYC - Free Report) , Paylocity Holding (PCTY - Free Report) and Qualys (QLYS - Free Report) are some better-ranked stocks in the broader Zacks Computer and Technology sector, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Paycom Software’s 2025 earnings has been revised downward by a cent to $8.95 per share over the past 30 days, indicating a 9.01% year-over-year increase. Paycom Software’s shares have gained 9.1%, year to date.
The consensus mark for Paylocity Holding’s 2025 earnings has been revised upward by a cent to $7.02 per share over the past 30 days, indicating a 6.85% year-over-year increase. Paylocity Holding’s shares have declined 12%, year to date.
The Zacks Consensus Estimate for Qualys’ 2025 earnings has been revised upward by four cents to $6.17 per share over the past 30 days, indicating a 0.65% year-over-year increase. Qualys’s shares have gained 0.7%, year to date.