MICRON TECHNOLOGY INC

Results of Operations

Consolidated Results

Total Revenue: Total revenue for first quarter of 2025 and 2024 was impacted by the factors described in the section titled “Industry Conditions” above.

Total revenue for the first quarter of 2025 increased 12% as compared to the fourth quarter of 2024 primarily due to increases in sales of DRAM products, partially offset by decreases in sales of NAND products.

•Sales of DRAM products increased 20% primarily due to a low-double-digit percent range increase in bit shipments driven by demand in data center markets and a high-single-digit percent range increase in average selling prices.

•Sales of NAND products decreased 5% primarily due to a low-single-digit percent range decrease in bit shipments and a low-single-digit percent range decrease in average selling prices.

Total revenue for the first quarter of 2025 increased 84% as compared to the first quarter of 2024 primarily due to increases in sales of both DRAM and NAND products.

•Sales of DRAM products increased 87% primarily due to a high-70% range increase in average selling prices and increases in bit shipments in the mid-single-digit percent range.

•Sales of NAND products increased 82% primarily due to a high-60% range increase in average selling prices and an approximate 10% increase in bit shipments.

Consolidated Gross Margin: Our consolidated gross margin has been impacted by the factors described in the section titled “Industry Conditions” above. Our consolidated gross margin percentage improved to 38% for the first quarter of 2025 from 35% for the fourth quarter of 2024, primarily due to improvements in margins for both DRAM and NAND products, as well as an increase in the share of revenue from DRAM. DRAM margins improved due to increases in average selling prices and a mix shift to high value HBM and DDR5 products. NAND margins improved primarily due to manufacturing cost reductions. Our consolidated gross margin percentage improved to 38% for the first quarter of 2025 from negative 1% for the first quarter of 2024 primarily due to increases in average selling prices and manufacturing cost reductions for both DRAM and NAND. Our consolidated gross margin for the first quarter of 2024 reflected $605 million of benefit due to lower costs from the sale of inventories written down to their net realizable value in 2023.

Revenue by Business Unit

Percentages of total revenue may not total 100% due to rounding.

Changes in revenue for each business unit for first quarter of 2025 as compared to the fourth quarter of 2024 were as follows:

•CNBU revenue increased 46% primarily due to increases in bit shipments and average selling prices driven by cloud server DRAM demand, including HBM.

•SBU revenue increased 3% primarily due to increases in bit shipments driven by demand in the data center SSD end market.

•MBU revenue decreased 19% primarily due to decreases in bit shipments as output was shifted to higher demand data center markets, and declines in average selling prices for both mobile DRAM and NAND.

•EBU revenue decreased 10% primarily due to decreases in bit shipments for both DRAM and NAND, as auto, industrial, and consumer customers managed inventories lower, and decreases in average selling prices for NAND.

Changes in revenue for each business unit for first quarter of 2025 as compared to the first quarter of 2024 were as follows:

•CNBU revenue increased 153% primarily due to increases in average selling prices and increases in bit shipments driven by improved demand, particularly in cloud server markets, including HBM.

•SBU revenue increased 165% primarily due to increases in average selling prices and bit shipments for NAND.

•MBU revenue increased 18% primarily due to increases in average selling prices for both DRAM and NAND, partially offset by decreases in bit shipments.

•EBU revenue increased 1% primarily due to increases in bit shipments, partially offset by declines in average selling prices.

Operating Income (Loss) by Business Unit

Percentages reflect operating income (loss) as a percentage of revenue for each business unit.

Changes in operating income or loss for each business unit for the first quarter of 2025 as compared to the fourth quarter of 2024 were as follows:

•CNBU operating income increased primarily due to higher bit shipments and increases in average selling prices.

29 | 2025 Q1 10-Q

•SBU operating income increased primarily due to higher bit shipments and manufacturing cost reductions.

•MBU operating income decreased primarily due to lower bit shipments and declines in average selling prices.

•EBU operating income decreased primarily due to lower bit shipments, declines in NAND average selling prices, and higher costs.

Changes in operating income or loss for each business unit for the first quarter of 2025 as compared to the first quarter of 2024 were as follows:

•CNBU operating income (loss) improved primarily due to increases in average selling prices and higher bit shipments.

•SBU operating income (loss) improved primarily due to increases in average selling prices, higher bit shipments, and manufacturing cost reductions.

•MBU operating income (loss) improved primarily due to increases in average selling prices and manufacturing cost reductions, partially offset by lower bit shipments.

•EBU operating income was relatively unchanged as higher bit shipments and manufacturing cost reductions were offset by declines in average selling prices.

Operating Expenses and Other

Research and Development: R&D expenses vary primarily with the number of development and pre-qualification wafers processed, the cost of advanced equipment dedicated to new product and process development, and personnel costs. Because of the lead times necessary to manufacture our products, we typically begin to process wafers before completion of performance and reliability testing. Development of a product is deemed complete when it is qualified through internal reviews and tests for performance and reliability. R&D expenses can vary significantly depending on the timing of product qualification.

R&D expenses for the first quarter of 2025 were relatively unchanged as compared to the fourth quarter of 2024. R&D expenses for the first quarter of 2025 increased 5% as compared to the first quarter of 2024 primarily due to an increase in employee compensation, partially offset by lower volumes of development and prequalification wafers.

Selling, General, and Administrative: SG&A expenses for the first quarter of 2025 were relatively unchanged as compared to the fourth quarter of 2024. SG&A expenses for the first quarter of 2025 increased 10% as compared to the first quarter of 2024 primarily due to an increase in employee compensation.

Income Taxes: Our income tax (provision) benefit consisted of the following:

In the first quarter of 2024, our tax expense was based on actual results for jurisdictions where small changes in our projected pre-tax income would have caused significant changes in the estimated annual effective tax rate. Beginning in the second quarter of 2024, we were able to estimate a more reliable annual effective tax rate and reverted to a global annual effective tax rate method for all jurisdictions.

The change in our effective tax rate for the first quarter of 2025 as compared to the fourth quarter of 2024 was primarily due to changes in profitability. The change in our effective tax rate for the first quarter of 2025 as compared to the first quarter of 2024 was primarily due to changes in profitability and the calculation of our tax expense using actual results in the first quarter of 2024.

We operate in a number of jurisdictions outside the United States, including Singapore, where we have tax incentive arrangements. These incentives expire, in whole or in part, at various dates through 2034 and are conditional, in part, upon meeting certain business operations and employment thresholds. The effect of tax incentive arrangements reduced our tax provision by $212 million (benefiting our diluted earnings per share by $0.19) for the first quarter of 2025. As a result of the low levels of profitability and jurisdictional mix of income, the benefit from tax incentive arrangements was not material for the periods presented for 2024.

Further changes in the tax laws of foreign jurisdictions could arise as a result of the base erosion and profit shifting project, including Pillar Two Model Rules (“Pillar Two”), undertaken by the Organisation for Economic Co-operation and Development (“OECD”). Nearly all European Union member states have enacted the Pillar Two legislation, which will be effective for us in 2025. We do not expect these enacted laws to materially impact our effective tax rate for 2025. On November 27, 2024, Singapore enacted legislation to implement Pillar Two, which will apply to us starting in 2026. While we are still evaluating the impacts, we expect our effective tax rate for 2026 to be in the high-teens percentage range. We also continue to monitor for additional guidance and legislative changes to Pillar Two in the jurisdictions where we operate.

Various tax reforms are being considered in multiple jurisdictions that, if enacted, contain provisions that could materially impact our tax expense. We continue to monitor the potential impact of these various tax reform proposals to our overall global effective tax rate and financial statements.

Other: Further information related to our operating expenses and other can be found in “Item 1. Financial Statements – Notes to Consolidated Financial Statements – Equity Compensation Plans”: