06/26/2024 | Press release | Distributed by Public on 06/26/2024 14:01
Quarterly Financial Results | ||||||||||||
(in millions, except per share amounts) |
GAAP(1)
|
Non-GAAP(2)
|
||||||||||
FQ3-24
|
FQ2-24
|
FQ3-23
|
FQ3-24 | FQ2-24 | FQ3-23 | |||||||
Revenue | $ | 6,811 | $ | 5,824 | $ | 3,752 | $ | 6,811 | $ | 5,824 | $ | 3,752 |
Gross margin | 1,832 | 1,079 | (668) | 1,917 | 1,163 | (603) | ||||||
percent of revenue | 26.9 | % | 18.5 | % | (17.8 | %) | 28.1 | % | 20.0 | % | (16.1 | %) |
Operating expenses | 1,113 | 888 | 1,093 | 976 | 959 | 866 | ||||||
Operating income (loss) | 719 | 191 | (1,761) | 941 | 204 | (1,469) | ||||||
percent of revenue | 10.6 | % | 3.3 | % | (46.9 | %) | 13.8 | % | 3.5 | % | (39.2 | %) |
Net income (loss) | 332 | 793 | (1,896) | 702 | 476 | (1,565) | ||||||
Diluted earnings (loss) per share | 0.30 | 0.71 | (1.73) | 0.62 | 0.42 | (1.43) |
FQ4-24
|
GAAP(1) Outlook
|
Non-GAAP(2) Outlook
|
Revenue
|
$7.60 billion ± $200 million | $7.60 billion ± $200 million |
Gross margin
|
33.5% ± 1.0% | 34.5% ± 1.0% |
Operating expenses
|
$1.19 billion ± $15 million | $1.06 billion ± $15 million |
Diluted earnings per share
|
$0.61 ± $0.08 | $1.08 ± $0.08 |
3rd Qtr.
|
2nd Qtr. |
3rd Qtr.
|
Nine months ended | |||||||
May 30, 2024 |
February 29, 2024 |
June 1, 2023 |
May 30, 2024 |
June 1, 2023 |
||||||
Revenue | $ | 6,811 | $ | 5,824 | $ | 3,752 | $ | 17,361 | $ | 11,530 |
Cost of goods sold | 4,979 | 4,745 | 4,420 | 14,485 | 12,511 | |||||
Gross margin | 1,832 | 1,079 | (668) | 2,876 | (981) | |||||
Research and development | 850 | 832 | 758 | 2,527 | 2,395 | |||||
Selling, general, and administrative | 291 | 280 | 219 | 834 | 701 | |||||
Restructure and asset impairments | - | - | 68 | - | 167 | |||||
Other operating (income) expense, net | (28) | (224) | 48 | (267) | 29 | |||||
Operating income (loss) | 719 | 191 | (1,761) | (218) | (4,273) | |||||
Interest income | 136 | 130 | 127 | 398 | 334 | |||||
Interest expense | (150) | (144) | (119) | (426) | (259) | |||||
Other non-operating income (expense), net | 10 | (7) | - | (24) | (2) | |||||
715 | 170 | (1,753) | (270) | (4,200) | ||||||
Income tax (provision) benefit | (377) | 622 | (139) | 172 | (201) | |||||
Equity in net income (loss) of equity method investees | (6) | 1 | (4) | (11) | (2) | |||||
Net income (loss) | $ | 332 | $ | 793 | $ | (1,896) | $ | (109) | $ | (4,403) |
Earnings (loss) per share | ||||||||||
Basic | $ | 0.30 | $ | 0.72 | $ | (1.73) | $ | (0.10) | $ | (4.03) |
Diluted | 0.30 | 0.71 | (1.73) | (0.10) | (4.03) | |||||
Number of shares used in per share calculations | ||||||||||
Basic | 1,107 | 1,104 | 1,094 | 1,104 | 1,092 | |||||
Diluted | 1,123 | 1,114 | 1,094 | 1,104 | 1,092 |
As of |
May 30, 2024 |
February 29, 2024 |
August 31, 2023 |
|||
Assets | ||||||
Cash and equivalents | $ | 7,594 | $ | 8,016 | $ | 8,577 |
Short-term investments | 785 | 990 | 1,017 | |||
Receivables | 5,131 | 4,296 | 2,443 | |||
Inventories | 8,512 | 8,443 | 8,387 | |||
Other current assets | 1,297 | 1,690 | 820 | |||
Total current assets | 23,319 | 23,435 | 21,244 | |||
Long-term marketable investments | 775 | 627 | 844 | |||
Property, plant, and equipment | 37,926 | 37,587 | 37,928 | |||
Operating lease right-of-use assets | 660 | 642 | 666 | |||
Intangible assets | 413 | 414 | 404 | |||
Deferred tax assets | 597 | 664 | 756 | |||
Goodwill | 1,150 | 1,150 | 1,150 | |||
Other noncurrent assets | 1,415 | 1,199 | 1,262 | |||
Total assets | $ | 66,255 | $ | 65,718 | $ | 64,254 |
Liabilities and equity | ||||||
Accounts payable and accrued expenses | $ | 5,145 | $ | 4,680 | $ | 3,958 |
Current debt | 398 | 344 | 278 | |||
Other current liabilities | 1,297 | 1,235 | 529 | |||
Total current liabilities | 6,840 | 6,259 | 4,765 | |||
Long-term debt | 12,860 | 13,378 | 13,052 | |||
Noncurrent operating lease liabilities | 609 | 593 | 603 | |||
Noncurrent unearned government incentives | 672 | 662 | 727 | |||
Other noncurrent liabilities | 1,049 | 956 | 987 | |||
Total liabilities | 22,030 | 21,848 | 20,134 | |||
Commitments and contingencies | ||||||
Shareholders' equity | ||||||
Common stock | 125 | 125 | 124 | |||
Additional capital | 11,794 | 11,564 | 11,036 | |||
Retained earnings | 40,169 | 39,997 | 40,824 | |||
Treasury stock | (7,552) | (7,552) | (7,552) | |||
Accumulated other comprehensive income (loss) | (311) | (264) | (312) | |||
Total equity | 44,225 | 43,870 | 44,120 | |||
Total liabilities and equity | $ | 66,255 | $ | 65,718 | $ | 64,254 |
Nine months ended |
May 30, 2024 |
June 1, 2023 |
||
Cash flows from operating activities | ||||
Net income (loss) | $ | (109) | $ | (4,403) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
||||
Depreciation expense and amortization of intangible assets | 5,794 | 5,819 | ||
Stock-based compensation | 620 | 448 | ||
Provision to write-down inventories to net realizable value
|
- | 1,831 | ||
Change in operating assets and liabilities:
|
|
|||
Receivables | (2,562) | 2,728 | ||
Inventories | (125) | (3,406) | ||
Other current assets
|
(435) | (35) | ||
Accounts payable and accrued expenses | 846 | (1,113) | ||
Other current liabilities
|
769 | (677) | ||
Other | 304 | 118 | ||
Net cash provided by operating activities | 5,102 | 1,310 | ||
Cash flows from investing activities | ||||
Expenditures for property, plant, and equipment | (5,266) | (6,215) | ||
Purchases of available-for-sale securities | (1,110) | (496) | ||
Proceeds from maturities and sales of available-for-sale securities
|
1,433 | 1,192 | ||
Proceeds from government incentives | 267 | 248 | ||
Other | (35) | (90) | ||
Net cash provided by (used for) investing activities | (4,711) | (5,361) | ||
Cash flows from financing activities | ||||
Repayments of debt | (1,816) | (706) | ||
Payments of dividends to shareholders | (384) | (378) | ||
Payments on equipment purchase contracts | (127) | (112) | ||
Repurchases of common stock - repurchase program | - | (425) | ||
Proceeds from issuance of debt | 999 | 6,716 | ||
Other | (40) | - | ||
Net cash provided by (used for) financing activities | (1,368) | 5,095 | ||
Effect of changes in currency exchange rates on cash, cash equivalents, and restricted cash
|
(15) | (13) | ||
Net increase (decrease) in cash, cash equivalents, and restricted cash | (992) | 1,031 | ||
Cash, cash equivalents, and restricted cash at beginning of period | 8,656 | 8,339 | ||
Cash, cash equivalents, and restricted cash at end of period | $ | 7,664 | $ | 9,370 |
3rd Qtr. | 2nd Qtr. | 3rd Qtr. | Nine months ended | |||||||
May 30, 2024 |
February 29, 2024 |
June 1, 2023 |
May 30, 2024 |
June 1, 2023 |
||||||
Provision to write down inventory to NRV | $ | - | $ | - | $ | (401) | $ | - | $ | (1,831) |
Lower costs from sale of inventory written down in prior periods
|
- | 382 | 281 | 987 | 281 | |||||
$ | - | $ | 382 | $ | (120) | $ | 987 | $ | (1,550) |
3rd Qtr. | 2nd Qtr. | 3rd Qtr. | ||||
May 30, 2024 |
February 29, 2024 |
June 1, 2023 |
||||
GAAP gross margin | $ | 1,832 | $ | 1,079 | $ | (668) |
Stock-based compensation | 80 | 80 | 60 | |||
Other | 5 | 4 | 5 | |||
Non-GAAP gross margin | $ | 1,917 | $ | 1,163 | $ | (603) |
GAAP operating expenses | $ | 1,113 | $ | 888 | $ | 1,093 |
Stock-based compensation | (137) | (129) | (91) | |||
Restructure and asset impairments | - | - | (68) | |||
Patent cross-license agreement gain | - | 200 | - | |||
Litigation settlement
|
- | - | (68) | |||
Non-GAAP operating expenses | $ | 976 | $ | 959 | $ | 866 |
GAAP operating income (loss) | $ | 719 | $ | 191 | $ | (1,761) |
Stock-based compensation | 217 | 209 | 151 | |||
Restructure and asset impairments | - | - | 68 | |||
Patent cross-license agreement gain | - | (200) | - | |||
Litigation settlement | - | - | 68 | |||
Other | 5 | 4 | 5 | |||
Non-GAAP operating income (loss) | $ | 941 | $ | 204 | $ | (1,469) |
GAAP net income (loss)
|
$ | 332 | $ | 793 | $ | (1,896) |
Stock-based compensation | 217 | 209 | 151 | |||
Restructure and asset impairments | - | - | 68 | |||
Patent cross-license agreement gain | - | (200) | - | |||
Litigation settlement | - | - | 68 | |||
Other | 3 | 2 | 7 | |||
Estimated tax effects of above and other tax adjustments(1)
|
150 | (328) | 37 | |||
Non-GAAP net income (loss) | $ | 702 | $ | 476 | $ | (1,565) |
GAAP weighted-average common shares outstanding - Diluted
|
1,123 | 1,114 | 1,094 | |||
Adjustment for stock-based compensation
|
13 | 20 | - | |||
Non-GAAP weighted-average common shares outstanding - Diluted
|
1,136 | 1,134 | 1,094 | |||
GAAP diluted earnings (loss) per share
|
$ | 0.30 | $ | 0.71 | $ | (1.73) |
Effects of the above adjustments
|
0.32 | (0.29) | 0.30 | |||
Non-GAAP diluted earnings (loss) per share
|
$ | 0.62 | $ | 0.42 | $ | (1.43) |
3rd Qtr. | 2nd Qtr. | 3rd Qtr. | ||||
May 30, 2024 |
February 29, 2024 |
June 1, 2023 |
||||
GAAP net cash provided by operating activities
|
$ | 2,482 | $ | 1,219 | $ | 24 |
Expenditures for property, plant, and equipment
|
(2,086) | (1,384) | (1,561) | |||
Payments on equipment purchase contracts
|
(45) | (26) | (36) | |||
Proceeds from sales of property, plant, and equipment | 41 | 13 | 34 | |||
Proceeds from government incentives
|
33 | 149 | 184 | |||
Investments in capital expenditures, net | (2,057) | (1,248) | (1,379) | |||
Adjusted free cash flow
|
$ | 425 | $ | (29) | $ | (1,355) |
FQ4-24
|
GAAP Outlook | Adjustments | Non-GAAP Outlook | |
Revenue
|
$7.60 billion ± $200 million
|
- |
$7.60 billion ± $200 million
|
|
Gross margin
|
33.5% ± 1.0%
|
1.0%
|
A |
34.5% ± 1.0%
|
Operating expenses
|
$1.19 billion ± $15 million
|
$125 million
|
B |
$1.06 billion ± $15 million
|
Diluted earnings per share(1)
|
$0.61 ± $0.08
|
$0.47
|
A, B, C |
$1.08 ± $0.08
|
Non-GAAP Adjustments
(in millions)
|
|||
A
|
Stock-based compensation - cost of goods sold
|
$ | 84 |
A
|
Other - cost of goods sold
|
4 | |
B
|
Stock-based compensation - research and development
|
77 | |
B
|
Stock-based compensation - sales, general, and administrative
|
48 | |
C
|
Tax effects of the above items and other tax adjustments | 315 | |
$ | 528 |