Micron Technology, Inc. (NASDAQ: MU)

Micron’s fiscal Q3 2025 delivered outstanding financial performance with record revenue of $9.30 billion, marking a 15% sequential increase from $8.05 billion in Q2 2025 and a remarkable 37% year-over-year growth from $6.81 billion in Q3 2024. This exceptional growth was driven by all-time-high DRAM revenue, including nearly 50% sequential growth in high-bandwidth memory (HBM) revenue, reflecting the surging demand for AI applications.

Gross margin expanded significantly to 37.7% from 26.9% in the prior year period, representing an improvement of 1,080 basis points year-over-year and 90 basis points sequentially. This margin expansion was driven by favorable pricing dynamics, improved product mix with higher-value solutions, and operational efficiencies. The non-GAAP gross margin reached 39.0%, demonstrating the company’s strong pricing power in memory markets.

Operating income surged to $2.17 billion compared to $719 million in Q3 2024, representing a 202% year-over-year increase. The operating margin improved to 23.3% from 10.6% in the prior year period. On a non-GAAP basis, operating income reached $2.49 billion with a margin of 26.8%, reflecting excellent operational leverage as revenue scaled.

Earnings performance was exceptional with GAAP diluted EPS of $1.68 versus $0.30 in Q3 2024, a 460% year-over-year increase. Non-GAAP diluted EPS reached $1.91 compared to $0.62 in the prior year period, representing 208% growth. The strong earnings growth reflects both revenue expansion and margin improvement across the business.

Cash flow generation remained robust with operating cash flow of $4.61 billion in Q3 2025, up 17% sequentially from $3.94 billion and 86% year-over-year from $2.48 billion. Adjusted free cash flow reached $1.95 billion, demonstrating Micron’s ability to generate substantial cash while making disciplined capital investments for future growth.

DRAM Performance was exceptional with all-time-high revenue driven by strong demand across multiple end markets. The DRAM business benefited from robust pricing dynamics and strong demand for high-performance memory solutions, particularly in data center and AI applications. HBM revenue achieved nearly 50% sequential growth, reflecting Micron’s leadership position in high-bandwidth memory solutions critical for AI workloads.

Data Center Segment delivered outstanding results with revenue more than doubling year-over-year and reaching a quarterly record. This exceptional growth was driven by increasing demand for AI training and inference applications, cloud computing expansion, and enterprise digital transformation initiatives. Micron’s advanced memory solutions are enabling the AI revolution across hyperscale data centers.

Consumer Markets showed strong sequential growth as demand for consumer electronics recovered from previous inventory corrections. The mobile market benefited from new smartphone launches and improving demand trends, while PC markets continued gradual recovery from earlier inventory adjustments.

Technology Leadership remained a key differentiator with Micron’s advanced process technologies and product innovations driving market share gains. The company’s 1β (1-beta) DRAM technology and 232-layer NAND solutions continue to provide competitive advantages in performance, power efficiency, and cost structure.

End market diversification provided resilience with balanced growth across data center, consumer, automotive, and industrial applications. This diversification strategy helps Micron capitalize on multiple growth drivers while reducing dependence on any single market segment.

Micron demonstrated exceptional cash flow generation and maintained a robust balance sheet position:

• Operating Cash Flow: $4.61 billion in Q3 2025, up 17% sequentially and 86% year-over-year, reflecting strong profitability and efficient working capital management
• Adjusted Free Cash Flow: $1.95 billion after capital investments, demonstrating the company’s ability to generate substantial cash while investing for growth
• Capital Expenditures: $2.66 billion in net investments, representing disciplined spending on technology leadership and manufacturing capabilities
• Cash Position: $12.22 billion in cash, marketable investments, and restricted cash, providing significant financial flexibility
• Nine-Month Performance: Operating cash flow of $11.8 billion for the nine months ended May 29, 2025, versus $5.1 billion in the prior year period

The company’s strong balance sheet with total assets of $78.4 billion and shareholders’ equity of $50.7 billion provides a solid foundation for continued investment in technology leadership and manufacturing capacity expansion. Current assets of $27.9 billion versus current liabilities of $10.1 billion demonstrate strong liquidity and financial stability.

Micron’s capital allocation strategy focuses on technology leadership investments, manufacturing capacity expansion, and returning capital to shareholders through dividends. The company declared a quarterly dividend of $0.115 per share, payable July 22, 2025, reflecting confidence in sustainable cash flow generation.

Working capital management remained efficient with inventories well-controlled at $8.7 billion and receivables of $7.4 billion, reflecting strong demand visibility and efficient operations. The company’s disciplined approach to capital allocation ensures investments are focused on the highest-return opportunities.

Micron provided optimistic guidance for Q4 2025, indicating continued strong momentum:

Q4 2025 Guidance

• Revenue: $10.7 billion ± $300 million, representing approximately 15% sequential growth
• GAAP gross margin: 41.0% ± 1.0%
• Non-GAAP gross margin: 42.0% ± 1.0%
• GAAP operating expenses: $1.35 billion ± $20 million
• Non-GAAP operating expenses: $1.20 billion ± $20 million
• GAAP diluted EPS: $2.29 ± $0.15
• Non-GAAP diluted EPS: $2.50 ± $0.15

The Q4 2025 guidance represents another sequential increase in revenue and continued margin expansion, reflecting strong end market demand and favorable pricing dynamics. The projected revenue of $10.7 billion would represent a new quarterly record, demonstrating Micron’s ability to capitalize on AI-driven memory demand.

Gross margin guidance of 41-42% indicates continued margin expansion as the company benefits from favorable product mix, pricing improvements, and operational efficiencies. The strong margin outlook reflects Micron’s technology leadership and market positioning in high-value memory solutions.

Full-year fiscal 2025 performance is tracking toward record revenue with solid profitability and free cash flow generation. Management expressed confidence in delivering strong results while making disciplined investments to build on technology leadership and manufacturing excellence to satisfy growing AI-driven memory demand.

The outlook reflects several positive trends including sustained AI infrastructure investment, memory content growth in data centers, improving consumer market conditions, and continued technology leadership driving market share gains. Micron is well-positioned to benefit from multiple secular growth drivers across its end markets.

Micron’s strategic initiatives focus on technology leadership, manufacturing excellence, and market expansion:

AI and Data Center Focus

• HBM (High Bandwidth Memory) leadership with nearly 50% sequential revenue growth
• Advanced DRAM solutions optimized for AI training and inference workloads
• Partnerships with leading AI chip companies and cloud service providers
• Capacity expansion for AI-specific memory solutions

Technology Leadership

• 1β (1-beta) DRAM technology providing industry-leading performance and efficiency
• 232-layer NAND flash technology delivering superior storage solutions
• Next-generation memory technologies including DDR5 and LPDDR5X
• Continuous R&D investment to maintain technology leadership

Manufacturing Excellence

• Disciplined capital investments in high-return manufacturing capacity
• Operational efficiency improvements driving margin expansion
• Supply chain optimization and quality enhancements
• Sustainable manufacturing practices and environmental initiatives

CEO Sanjay Mehrotra emphasized that “Micron is on track to deliver record revenue with solid profitability and free cash flow in fiscal 2025, while making disciplined investments to build on technology leadership and manufacturing excellence to satisfy growing AI-driven memory demand.”

The company’s focus on AI-enabling memory solutions positions it well to benefit from the ongoing AI infrastructure build-out. Micron’s technology roadmap includes continued innovation in high-bandwidth memory, next-generation DRAM and NAND technologies, and emerging memory solutions for future computing paradigms.