Memory chips maker Micron (NYSE:MU) reported revenue ahead of Wall Street’s expectations in Q2 CY2025, with sales up 36.6% year on year to $9.30 billion. On top of that, next quarter’s revenue guidance ($10.7 billion at the midpoint) was surprisingly good and 7.2% above what analysts were expecting. Its non-GAAP profit of $1.91 per share was 18.9% above analysts’ consensus estimates.
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Micron (MU) Q2 CY2025 Highlights:
- Revenue: $9.30 billion vs analyst estimates of $8.86 billion (36.6% year-on-year growth, 4.9% beat)
- Adjusted EPS: $1.91 vs analyst estimates of $1.61 (18.9% beat)
- Adjusted Operating Income: $2.49 billion vs analyst estimates of $2.14 billion (26.8% margin, 16.6% beat)
- Revenue Guidance for Q3 CY2025 is $10.7 billion at the midpoint, above analyst estimates of $9.99 billion
- Adjusted EPS guidance for Q3 CY2025 is $2.50 at the midpoint, above analyst estimates of $2.03
- Operating Margin: 23.3%, up from 10.6% in the same quarter last year
- Free Cash Flow Margin: 18%, up from 5.8% in the same quarter last year
- Inventory Days Outstanding: 137, down from 161 in the previous quarter
- Market Capitalization: $142.9 billion
“Micron delivered record revenue in fiscal Q3, driven by all-time-high DRAM revenue including nearly 50% sequential growth in HBM revenue. Data center revenue more than doubled year-over-year and reached a quarterly record, and consumer-oriented end markets had strong sequential growth,” said Sanjay Mehrotra, Chairman, President and CEO of Micron Technology.
Company Overview
Founded in the basement of a Boise, Idaho dental office in 1978, Micron (NYSE:MU) is a leading provider of memory chips used in thousands of devices across mobile, data centers, industrial, consumer, and automotive markets.
Revenue Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Thankfully, Micron’s 10.8% annualized revenue growth over the last five years was solid. Its growth beat the average semiconductor company and shows its offerings resonate with customers. Semiconductors are a cyclical industry, and long-term investors should be prepared for periods of high growth followed by periods of revenue contractions.
We at StockStory place the most emphasis on long-term growth, but within semiconductors, a half-decade historical view may miss new demand cycles or industry trends like AI. Micron’s annualized revenue growth of 36.4% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated. 
This quarter, Micron reported wonderful year-on-year revenue growth of 36.6%, and its $9.30 billion of revenue exceeded Wall Street’s estimates by 4.9%. Beyond the beat, this marks 7 straight quarters of growth, showing that the current upcycle has had a good run - a typical upcycle usually lasts 8-10 quarters. Company management is currently guiding for a 38.1% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 28.4% over the next 12 months, a deceleration versus the last two years. Still, this projection is eye-popping given its scale and suggests the market is baking in success for its products and services.
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Product Demand & Outstanding Inventory
Days Inventory Outstanding (DIO) is an important metric for chipmakers, as it reflects a business’ capital intensity and the cyclical nature of semiconductor supply and demand. In a tight supply environment, inventories tend to be stable, allowing chipmakers to exert pricing power. Steadily increasing DIO can be a warning sign that demand is weak, and if inventories continue to rise, the company may have to downsize production.
This quarter, Micron’s DIO came in at 137, which is 5 days below its five-year average. At the moment, these numbers show no indication of an excessive inventory buildup.
Key Takeaways from Micron’s Q2 Results
We were impressed by Micron’s strong improvement in inventory levels. We were also excited it beat analysts' estimates across all fundamental metrics for both this quarter and next quarter's guidance. Zooming out, we think this was a good print with some key areas of upside. The stock traded up 3.5% to $131.92 immediately following the results.
Micron put up rock-solid earnings, but one quarter doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free.