Micron Technology Inc. (NASDAQ:MU)

The financial data reveals notable fluctuations in cost management, profitability, and operational expenses over the reported periods.

Cost of Goods Sold (COGS)

COGS as a percentage of revenue exhibits significant volatility. Initially, it shows a general declining trend from approximately 73.44% to a low near 52.72%, indicating improved production efficiency or cost control from late 2019 through late 2021. However, starting in late 2022, COGS sharply increases, reaching extremely high values over 110% in mid to late 2023, signaling possible cost overruns or margin compression. Toward the latest periods in 2024 and 2025, COGS moderates again, though remaining above 50%, which suggests partial recovery but still at elevated cost levels compared to earlier years.

Gross Margin

Gross margin trends closely inversely with COGS, starting around 26.56% and improving gradually to a peak near 47.28% in late 2021. This improvement aligns with the reduction in COGS and reflects enhanced profitability at the gross profit level. However, from late 2022 onward, gross margin dramatically declines, turning negative around early 2023, coinciding with elevated COGS percentages. This period suggests severe margin erosion due to increased costs or pricing pressures. Recovery begins mid-2023, with gross margin rising back into positive territory and reaching over 44% by mid-2025, indicating a rebound in gross profitability.

Research and Development (R&D)

R&D expenses as a percentage of revenue fluctuate moderately between roughly 9% and 21%. There is a noticeable increase in R&D intensity in late 2022 through early 2023, peaking near 21.34%, which may reflect accelerated investment in innovation during a challenging financial period. Afterward, there is a steady decrease in R&D spend relative to revenue, falling back towards 9.25% by mid-2025, signaling a normalization or cost containment effort in this area.

Selling, General, and Administrative (SG&A)

SG&A expenses display a generally declining trend from approximately 4.65% down to below 3% over the timeline, with some spikes coinciding with operational difficulties around late 2022 and early 2023, reaching above 6%. The subsequent return to around 2.78% suggests improving cost efficiency in administrative functions following a peak period of elevated spending.

Restructure and Asset Impairments

Recorded impairments and restructuring costs show sporadic impacts, with significant spikes notably in mid-2021 (around -6.1%) and again in late 2022 to early 2023 (around -2.33% to -1.81%). These periods coincide with deteriorations in profitability and margin, indicating organizational adjustments or asset write-downs in response to adverse conditions. Other periods show minimal to no impairment costs.

Operating Income

Operating income as a percentage of revenue follows a pattern similar to gross margin. It peaks positively around late 2021, exceeding 35%, but then decreases sharply, turning strongly negative during late 2022 and early 2023, with values near -62.36%. This decline highlights severe profitability challenges at the operating level during that interval. Operating income then gradually improves, returning to positive territory by early 2024 and reaching over 32% in mid-2025, implying successful operational recovery.

Interest Income and Expense

Interest income shows a gradual increase over time, rising from under 1% to levels above 3% during early 2023, then decreasing to around 1.29% by mid-2025. Interest expense remains relatively low, fluctuating mostly below 1%, but spikes to over 3% during the period of operational distress in 2023, before reducing again. Net interest results contribute modestly to overall profitability fluctuations but align with the periods of financial stress and recovery.

Other Operating and Non-Operating Items

Other operating income/expense and non-operating income/expense exhibit intermittent effects with occasional positive and negative values but do not dominate the financial results. Notable positive spikes, such as in early 2024 at 3.85%, suggest occasional one-time gains or accounting adjustments that assist recovery phases.

Income Before Tax and Net Income

Income before tax closely shadows operating income trends, with strong growth to about 35% by late 2021, followed by a downturn into significant losses around 2023, and eventual recovery by 2025. Income tax provision exhibits volatility, including unusual positive impacts suggesting tax benefits or credits during recovery phases in 2024. Net income swings from double-digit positive percentages to deep negative territory (-62.6%) in early 2023, reflecting the harsh operating environment, then recovers steadily to reach approximately 28% by mid-2025.

Summary Insights

The overall financial pattern depicts a company that experienced an extended period of improving cost management and profitability until late 2021, followed by a severe downturn characterized by escalating costs, negative margins, and net losses through 2023. This downturn appears linked to both operational challenges and possible strategic restructuring, as indicated by impairment charges and increased R&D. Subsequent quarters demonstrate a gradual and notable recovery in profitability and cost efficiency, with margins rebounding and income returning to positive levels by 2024 and sustaining improvement through 2025.