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Call sheet · Q3'25

Micron Technology (MU)

Q3'25 earnings call · held 2025-06-25 · compared with the Q2'25 call · management-credibility review
11/12
Disclosure score
2 medium, 6 low flags
Financial quality
Bottom line
The **sleeper story is the D4/LP4 shortage wave** - these end-of-life products are only low single-digit percent of revenue but they're forcing allocation and creating unexpected pricing leverage across the entire DRAM stack. Meanwhile, everyone's focused on the obvious HBM acceleration story, which is real but already well-telegraphed. The **binding constraint is physical HBM capacity** through 2026, not demand - they're sold out for 2025 and customers are scrambling for 2026 supply. Most revealing quote: 'We are now on allocation for these products and are working with customers to try and support their high-priority near-term demand' - that's pricing power materializing in real time. My view changes if HBM customer concentration becomes a risk or if NAND pricing inflection fails to materialize in calendar Q2 despite their supply discipline.

The 30-second version

  • D4/LP4 shortage wave creating unexpected pricing power across legacy nodes
  • HBM share target pulled forward by 6 months - they're executing ahead of the torrid demand
  • NAND utilization remains deliberately constrained despite 10% structural capacity reduction

What changed this quarter

MetricQ2'25Q3'25Change
Revenue$8.1B (-8% seq, +38% YoY)$9.3B (+15% seq, +37% YoY)Record quarterly revenue, $1.2B sequential jump
Gross Margin37.9% (-160 bps seq)39% (+110 bps seq)Beat high end of guidance by 250 bps
EPS$1.56$1.91 (+22% seq)Beat high end by healthy margin
HBM Revenue>$1B (+50% seq)Nearly 50% sequential growth again$6B+ run rate now vs $1B milestone last quarter
DRAM Revenue$6.1B (-4% seq, +47% YoY)$7.1B (+15% seq, +51% YoY)Record DRAM revenue, 76% of total
NAND Revenue$1.9B (-17% seq, +18% YoY)$2.2B (+16% seq, +4% YoY)Sequential bounce but YoY deceleration
Operating Margin24.9% (-260 bps seq)26.8% (+190 bps seq)Strong operational leverage on volume
Free Cash Flow$857M>$1.9BHighest quarterly FCF in over 6 years
Inventory Days158 days (+9 days seq)139 days (-19 days seq)Sharp inventory burn on strong shipments
CNBU Revenue$4.6B (+4% seq)$5.1B (+11% seq)Fourth consecutive record, nearly 50% HBM growth

Accountability tracked

8 new promises made4 narrative shifts flagged6 prior promises scored
Inside the full report
The complete write-up covers the full promise ledger with kept/missed calls, disclosure-quality scoring, the metrics-vanished check, verification items, and the questions to ask next quarter.
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Scores, kept-promise rates, and flags on this site reflect the author's opinion, applying a stated methodology to statements management made on public earnings calls. Informational and educational purposes only - not investment advice, a recommendation, or an offer to buy or sell any security. Sources believed reliable but not guaranteed; the author may hold positions in the securities discussed.

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