How MU (Micron Technology) Makes Money in 2025: A Deep-Dive With Income Statement

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Understanding how a semiconductor leader like MU (Micron Technology) makes money is essential for investors and anyone interested in the business of memory and storage solutions. In this post, we break down MU's quarterly income statement (Q3 2025) using a Sankey chart to visualize the financial flows — what comes in, where it goes, and what's left as profit.

Quick MU Overview

Micron Technology (MU) operates as a global leader in the design and manufacture of memory and storage solutions, including DRAM, NAND, and NOR flash memory products. Revenue comes primarily from the sale of these semiconductor products to customers in computing, mobile, automotive, and industrial markets. The company’s business is organized into segments such as Compute & Networking, Embedded, Mobile, and Storage, though for Q3 2025, all revenue is reported under "Other" due to segment reporting changes.

Revenue Breakdown

• Total Revenue (Q3 2025): $11.3B (+46.0% YoY)
  • Compute & Networking BU: $0.0B (0% of total)
  • Embedded BU Revenue: $0.0B (0% of total)
  • Mobile BU Revenue: $0.0B (0% of total)
  • Storage BU Revenue: $0.0B (0% of total)
  • Other: $11.3B (100% of total)
  • Growth is powered by robust demand for advanced memory and storage solutions across data center, AI, and mobile device markets.

Gross Profit and Margins

• Gross Profit: $5.05B (44.7% gross margin)
  • Cost of Revenue: $6.26B (+24.9% YoY)
  • MU maintains strong margins due to its scalable manufacturing processes, advanced technology leadership, and operational efficiencies.
• Most costs come from manufacturing, materials, and supply chain operations.

Operating Income and Expenses

• Operating Income: $3.69B (+142.6% YoY, 32.6% margin)
• Operating Expenses: $1.30B (+7.0% YoY)
  • R&D: $1.05B (+15.9% YoY, 9.3% of revenue) — Focused on next-generation memory technologies and process innovation.
  • SG&A: $314M (+6.4% YoY, 2.8% of revenue) — Covers sales, marketing, administrative, and corporate functions.
  • MU continues to prioritize innovation and invest in growth while maintaining efficiency in its cost structure.

Net Income

• Pre-Tax Income: $1.39B (-8.0% YoY, 12.3% margin)
• Income Tax: Not disclosed for Q3 2025
• Net Income: $3.20B (+260.9% YoY, 28.3% net margin)
• MU converts a significant portion of sales into profit due to its scale, technology leadership, and pricing power in the memory market.

What Drives MU's Money Machine?

• Memory and Storage Product Sales: 100% of revenue is derived from the sale of DRAM, NAND, and related memory products to global OEMs and hyperscale customers.
• R&D Investment: $1.05B invested in Q3 2025, supporting leadership in high-performance memory for AI, data center, and automotive applications.
• Operational Efficiency: Operating expenses are tightly managed, with SG&A at just 2.8% of revenue.
• Future Growth Areas: Expansion into AI-optimized memory, automotive-grade solutions, and next-gen storage, though these segments are not yet broken out as separate profit centers.

Visualizing MU's Financial Flows

The Sankey chart below visualizes how each dollar flows from gross revenue, through costs and expenses, down to net income. This helps investors spot where value is created, what areas weigh on profits, and how efficiently the company operates.

• Most revenue flows into gross profit, with operating expenses (especially R&D) taking the largest chunk.
• Even after significant R&D investments, 28.3% of revenue drops to the bottom line.

Key Takeaways

• MU's money comes overwhelmingly from memory and storage product sales to enterprise and consumer markets.
• High gross and net margins illustrate the power of MU's technology-driven, scalable business model.
• Heavy investment in R&D, balanced by efficiency in operating costs.
• Ongoing growth is driven by demand for AI, cloud computing, and advanced mobile devices.

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FAQ About MU's Income Statement

1. What is the main source of MU's revenue in 2025?

MU generates over 100% of its revenue from the sale of memory and storage products, including DRAM and NAND flash, to customers in computing, mobile, automotive, and industrial sectors. No other revenue segments were reported separately in Q3 2025.

2. How profitable is MU in Q3 2025?

MU reported net income of $3.20B in Q3 2025, with a net margin of approximately 28.3%, reflecting strong profitability driven by robust demand and operational efficiency.

3. What are the largest expense categories for MU?

The biggest expenses on MU's income statement are operating expenses, particularly Research & Development (R&D) at $1.05B in Q3 2025, as MU prioritizes innovation in memory technology. SG&A expenses were $314M.

4. Why does [segment/division] operate at a loss?

While individual segment data is not disclosed for Q3 2025, historically, new technology or business units may operate at a loss due to heavy upfront R&D and market development investments, with the expectation of long-term growth and profitability.

5. How does MU's effective tax rate compare to previous years?

MU's effective tax rate for Q3 2025 was not disclosed. Historically, the company's tax rate fluctuates based on geographic revenue mix, R&D tax credits, and international structuring.