Micron Technology Q4 Earnings Call Highlights

Key Points

• Micron reported record results, with fiscal 2026 revenue of $133.2 billion and fourth-quarter revenue of $54.2 billion. Fourth-quarter non-GAAP EPS reached $33.42, while gross margin rose to 87%.
• AI demand is tightening memory supply: DRAM and NAND revenue, pricing and shipments all reached records, while data-center SSD revenue surged to nearly $10 billion. Micron expects supply constraints to persist through fiscal 2027 and 2028 and has already committed most of its 2027 HBM supply.
• Micron forecast fiscal first-quarter 2027 revenue of $61.5 billion and non-GAAP EPS of $38.15. The company plans higher capital spending to expand capacity and expects to increase shareholder returns, primarily through share repurchases, after reaching its target cash level.

Micron Technology NASDAQ: MU reported record fiscal fourth-quarter and full-year results, with revenue, gross margin and earnings per share exceeding the high end of its guidance. Management said it expects fiscal 2027 to be another record year as artificial intelligence-related demand tightens memory and storage supply conditions.

For fiscal 2026, Micron reported revenue of $133.2 billion, up 256% from the prior year, while non-GAAP gross margin rose to 81.1%. Non-GAAP earnings per share increased 811% year over year to $75.52, according to CFO Mark Murphy.

Fiscal fourth-quarter revenue reached $54.2 billion, up 31% sequentially and 379% year over year, marking the company’s sixth consecutive quarterly revenue record. Fourth-quarter non-GAAP diluted EPS was $33.42, up 33% from the prior quarter, while gross margin was 87%, up 210 basis points sequentially.

DRAM and NAND Results Reach Records

Micron’s fiscal fourth-quarter DRAM revenue was $39.8 billion, representing 73% of company revenue and rising 27% sequentially. DRAM bit shipments increased in the mid-single-digit percentage range sequentially, while pricing rose in the high-teens percentage range amid tight industry supply, Murphy said.

NAND revenue totaled $14.1 billion, or 26% of revenue, increasing 42% sequentially. NAND bit shipments rose about 10%, while prices increased approximately 30% sequentially.

The company’s business units each posted record revenue. Core Data Center Business Unit revenue was $18 billion, up 56% sequentially, while Cloud Memory Business Unit revenue was $16.3 billion, up 18%. Mobile and Client Business Unit revenue totaled $13.1 billion, and Automotive and Embedded Business Unit revenue reached $6.8 billion.

CEO Sanjay Mehrotra said data center SSD revenue was nearly $10 billion during the fourth quarter, more than 10 times the year-ago level and more than two-thirds of Micron’s total NAND revenue. The company said it remains on track for a fifth consecutive year of record market share in data center SSDs during calendar 2026.

AI Demand Drives Supply Outlook

Mehrotra said industry demand had strengthened since Micron’s prior earnings call, and the company expects memory and storage supply-demand conditions to be “much tighter” in fiscal 2027 and 2028 than in fiscal 2026.

For calendar 2027 and 2028, Micron expects industry NAND bit shipments to grow in the mid-20% range and DRAM bit shipments to rise in the low-20% range. The company expects both markets to remain supply constrained. It also expects HBM bit shipments to grow faster than conventional DRAM through calendar 2028.

Micron expects server unit growth in the high-teens percentage range in both calendar 2026 and 2027. While management said memory-content growth in servers has moderated from earlier expectations because of tight supply, it said larger AI models, longer context lengths and increased concurrency continue to support demand for memory and storage.

Mehrotra said Micron has completed agreements for the vast majority of its calendar 2027 HBM bit supply, with significant year-over-year price increases. He said those increases are narrowing the gross-margin gap between HBM and conventional DRAM.

The company also said it is working with NVIDIA on what Mehrotra described as the industry’s first custom HBM4E implementation, NV-HBM, intended for next-generation GPUs and NVLink Fusion platforms.

Customer Agreements and Capacity Plans

Micron has signed 26 multi-year strategic customer agreements, or SCAs, with take-or-pay volume commitments. Management estimates the agreements represent more than 35% of the company’s revenue through 2030, with three-quarters of that expected revenue subject to defined pricing frameworks.

Murphy said remaining performance obligations associated with agreements that have determined pricing frameworks totaled approximately $150 billion. Customer financial commitments under the signed agreements and extensions have increased to $32 billion, mostly in the form of cash deposits.

During the question-and-answer session, Mehrotra said Micron could ultimately have SCAs covering roughly 50% of revenue through 2030, though the figure could vary with revenue from the rest of its business. He added that more than 75% of the company’s 2027 output was already committed across SCA and non-SCA customers.

Micron plans to increase capital expenditures in fiscal 2027 versus prior plans, primarily to accelerate construction of clean-room space for late calendar 2028 and beyond. Murphy said first-half fiscal 2027 capital expenditures are expected to total about $25 billion, including approximately $11.5 billion in the fiscal first quarter, with second-half spending expected to be higher.

The company expects initial wafer output from its Idaho ID1 fab in mid-calendar 2027, from ID2 in late calendar 2028 and from its first New York fab in calendar 2030. It also expects initial output from a Japan DRAM expansion in late calendar 2028, while Singapore’s new NAND facility is expected to begin output in the second half of calendar 2028.

Outlook and Capital Returns

For fiscal first-quarter 2027, Micron forecast revenue of $61.5 billion, plus or minus $1.5 billion, and non-GAAP EPS of $38.15, plus or minus $1. Gross margin is expected to be about 86.25%, and operating expenses are projected at approximately $2.06 billion.

Murphy said fiscal first-quarter gross margin is expected to be the low point for fiscal 2027. The outlook reflects approximately $1 billion of higher costs, including the effect of increased fiscal 2026 incentive compensation absorbed into inventory, startup costs and other expenses. The company expects gross margins to improve after the first quarter as pricing continues to rise at a more moderate pace.

Micron generated $44 billion in operating cash flow and $33.2 billion in free cash flow during the fourth quarter. It ended the period with $73.5 billion in cash and investments, $5.2 billion in debt and net cash of $68.3 billion. Murphy said the company expects to reach its target cash level by the end of the fiscal first quarter and intends to increase capital returns beginning Dec. 9, with excess cash primarily expected to be returned through share repurchases over time.

About Micron Technology (NASDAQ:MU)

Micron Technology, Inc is a semiconductor company that develops and manufactures memory and storage solutions. Its product portfolio includes dynamic random-access memory (DRAM), NAND flash memory, three-dimensional XPoint-related technologies, solid-state drives, and high-bandwidth memory products designed for demanding computing applications.

The company serves customers across the data center, artificial intelligence, networking, automotive, industrial, mobile, consumer electronics, and embedded markets.

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