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Earnings call · Aug 2026 (Q4 FY26)

MICRON TECHNOLOGY Q4 FY26 earnings call MU

Sep 30, 2026 Source

Executive summary

Micron Q4 FY26 — Record Revenue, Gross Margin, and EPS Driven by AI Demand

Micron delivered exceptional Q4 FY26 results, setting new records across key financial metrics, driven by robust AI demand and strategic customer agreements. The company anticipates even stronger performance in FY27, with continued tight supply-demand conditions expected through 2028, necessitating increased CapEx for clean room expansion. Management remains focused on technology leadership and disciplined investment to capitalize on the "Super Intelligence" opportunity.

Highlights

5

  • Fiscal Q4 revenue was $54.2 billion, up 31% sequentially and 379% year-over-year, marking the sixth consecutive quarterly record.

  • Fiscal Q4 gross margin reached 87%, up 210 basis points sequentially.

  • Fiscal Q4 non-GAAP diluted EPS was $33.42, up 33% sequentially.

  • Fiscal 2026 full-year revenue was a record $133.2 billion, up 256% year-over-year, with EPS up 811% to $75.52.

  • Data center SSD revenue in fiscal Q4 was nearly $10 billion, more than 10x the year-ago quarter, representing over 2/3 of total NAND revenue.

Concerns

3

  • Fiscal Q1 gross margin is expected to be a floor at 86.25% due to approximately $1 billion in higher costs from increased FY26 incentive compensation absorbed into inventory and start-up costs.

  • Operating expenses are projected to increase by approximately $2.5 billion in fiscal 2027, primarily due to higher R&D and incentive compensation.

  • Fiscal Q4 days of inventory increased by 9 days sequentially to 129 days, partially due to node end-of-life related build ahead.

Guidance & targets

CategoryTargetConfidence
Fiscal Q1 FY27 Revenue
$61.5 billion, plus or minus $1.5 billion
high materiality
High
Fiscal Q1 FY27 Gross Margin
approximately 86.25%
high materiality
High
Fiscal Q1 FY27 Operating Expenses
approximately $2.06 billion
medium materiality
High
Fiscal Q1 FY27 Non-GAAP Diluted EPS
$38.15 per share plus or minus $1
high materiality
High
Fiscal 2027 Revenue
another record year with sequential revenue growth each quarter
high materiality
High
Fiscal 2027 Operating Expenses
increase by approximately $2.5 billion
medium materiality
High
Fiscal Q1 FY27 Tax Rate
around 15.5%
low materiality
High
Fiscal 2027 Tax Rate
around 15.5%
low materiality
High
Fiscal Q1 FY27 CapEx
around $11.5 billion
high materiality
High
First Half Fiscal 2027 CapEx
approximately $25 billion
high materiality
High
Fiscal 2027 CapEx
higher in the second half of fiscal 2027
high materiality
High
Fiscal 2027 Construction CapEx Growth Rate
meaningfully higher growth rate... as compared to equipment CapEx
medium materiality
High
Industry NAND Bit Shipments Growth
low 20s percentage range
medium materiality
High
Micron NAND Supply Growth
grow less than industry supply growth
medium materiality
High
Industry NAND Bit Shipments Growth
approximately in the mid-20s percentage range
medium materiality
High
Industry DRAM Bit Shipments Growth
mid-20s percentage range
medium materiality
High
Micron DRAM Supply Growth
approximately in line with industry supply growth
medium materiality
High
Industry DRAM Bit Shipments Growth
approximately in the low 20s percentage range
medium materiality
High
Industry HBM Bit Shipments Growth
grow faster than conventional DRAM
high materiality
High
Capital Return
return 100% of our excess cash to shareholders
high materiality
High
Capital Return Increase Date
increase our capital return from December 9, 2026
high materiality
High
Fiscal 2027 Incentive Compensation Levels
higher incentive compensation levels
low materiality
High
Fiscal Q1 FY27 DRAM Bit Shipments Growth
single-digit sequential bit growth
medium materiality
High
Fiscal Q1 FY27 NAND Bit Shipments Growth
single-digit sequential bit growth
medium materiality
High
Fiscal Q1 FY27 DRAM Cost
double-digit for cost
medium materiality
High
Fiscal Q1 FY27 NAND Cost
double-digit for cost
medium materiality
High
Fiscal 2027 R&D Expense Increase
over $1 billion
medium materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Cloud Memory Business Unit (CMBU)
Revenue up sequentially driven by higher pricing and bit shipments. Gross margins flat sequentially, driven by higher pricing, offset by higher HBM mix.
% of total company revenue: 30%
$16.3 billion—18%83%
Core Data Center Business Unit (CDBU)
Revenue up sequentially driven by higher pricing and bit shipments. Gross margins up 290 bps sequentially, driven by higher pricing and favorable mix.
% of total company revenue: 33%
$18 billion—56%90%
Mobile and Client Business Unit (MCBU)
Revenue up sequentially, driven by higher pricing, partially offset by lower bit shipments. Gross margins up 260 bps sequentially, driven primarily by higher pricing and favorable mix. Nearly half of MCBU revenue generated by 1-gamma products.
% of total company revenue: 24%Revenue from 1-gamma products: nearly half
$13.1 billion—14%90%
Automotive and Embedded Business Unit (AEBU)
Revenue up sequentially, driven by higher pricing and higher bit shipments. Gross margins up 470 bps sequentially, driven by higher pricing.
% of total company revenue: 13%
$6.8 billion—47%84%

MU operating KPIs by quarter

MU operating KPIs stated on its earnings calls, by fiscal quarter
KPI May 2026 Q3 FY26This call Aug 2026 Q4 FY26Change vs prior quarter
Remaining performance obligation (RPO)
$5B+ RPO at the end of fiscal Q3 was over $5 billion. Source transcript
~$150B To date, we have signed 26 SCAs in total, and our remaining performance obligations, or RPO, is approximately $150 billion. Source transcript
—

Operating figures the company states on every call, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Orderbook & backlog

Remaining Performance Obligations (RPO) approximately $150 billion Q4 FY26

Reflects contract value for 26 SCAs that have a determined pricing framework (fixed price or subject to pricing floor/ceiling). Based on committed volumes and minimum pricing, inherently conservative. Expected revenue to well exceed associated RPO over terms of agreements.

Product announcements

ProductTypeDetails
NVHBM (Custom HBM4E)roadmap

Deals & partnerships

Multiple customers Strategic Customer Agreements (SCAs) for multiyear take-or-pay supply of memory and storage. $32 billion through 2030

26 SCAs signed, with 1-year extensions for 2 agreements into 2031. Financial commitments are mostly cash deposits. New SCA discussions involve higher pricing based on prevailing market conditions.

Capital programs

New York Fab underway

Benefit:U.S.-based supply assurance for DDR, LP DRAM and HBM products.

Celebrated a concrete poll milestone for the first New York fab.

ID.1 Fab on track

Benefit:U.S.-based supply assurance for DDR, LP DRAM and HBM products.

Fab is on track to commence wafer output.

ID.2 Fab on track

Benefit:U.S.-based supply assurance for DDR, LP DRAM and HBM products.

Fab is on track to commence wafer output.

Japan DRAM Fab Expansion underway
Start: Q4 FY26

Benefit:Support technology node transitions.

Groundbreaking ceremony held in fiscal Q4.

Taiwan Tonggu Facility on track

On track for meaningful product shipments.

Singapore HBM Advanced Packaging Facility ahead of plan

Benefit:HBM advanced packaging.

Clean room preparation is ahead of plan.

Singapore New NAND Facility on track

Benefit:NAND production.

Construction is on track.

Risks & headwinds

Supply-demand imbalance for memory and storage FY27, FY28

much tighter in fiscal 2027 and 2028 than they were in 2026

Mitigation:Increased CapEx for construction to accelerate clean room space availability in late CY28 and beyond; optimizing production from available clean room space; disciplined approach to ramping equipment capacity with demand; strategic customer agreements (SCAs) providing long-term demand visibility.

Higher costs impacting Q1 FY27 gross margin Q1 FY27

roughly $1 billion of higher cost in Q1

Mitigation:Expected to be a floor for gross margins in FY27, with higher gross margins beyond Q1 due to continued price increases and strong operating performance. These costs are considered variable or temporal.

Increased operating expenses FY27

increase by approximately $2.5 billion in fiscal 2027

Mitigation:Primarily driven by higher R&D to support opportunities in memory and storage, and higher incentive compensation plans, indicating strategic investment for future growth.

Inventory increase Q4 FY26

Days of inventory at 129, an increase of 9 days sequentially

Mitigation:Expected to decline in coming quarters; increase includes node end-of-life related build ahead and manufacturing-related incentive compensation absorbed into inventories.

What to watch in Q1 FY27

Capital Return Increase

December 9, 2026
Current Current authorization $2.2 billion
Target Increased authorization and commencement of stronger capital return

Why it matters

Signals commitment to shareholder returns and capital allocation discipline, especially with significant cash generation.

As noted previously, we intend to increase our capital return from December 9, 2026, the second anniversary of the signature of our definitive chips agreements.

Q&A highlights

Analyst asked for more clarity on Micron's capital return plans, specifically regarding a minimum cash balance and the pace of buybacks, given the company's significant cash holdings.

Mark Murphy stated that Micron has the ability and intent to increase capital return, primarily through share repurchases, starting December 9, 2026. He noted that the company expects to reach a target cash level by the end of fiscal Q1 FY27 and will seek additional authorization for share repurchases beyond the current $2.2 billion.

“we have the ability and the intent to increase our capital return and we -- you can expect us to seek to increase our authorization and commence stronger capital return from December 9 in accordance with the agreements we have with on chips.”

asked by Timothy Arcuri · answered by Mark Murphy

2 min read 7 chapters

Detailed narrative

AI-Driven Demand and Strategic Importance of Memory

Micron emphasized that AI is becoming "super intelligence," with memory enhancing the competitiveness of customer platforms across end markets. The company highlighted that greater memory capability enables more scalable growth, improves user experience, and increases value from AI applications, providing significant differentiation opportunities for Micron.

Technology Leadership and Product Portfolio

Micron's 1-gamma DRAM and G9 NAND nodes are its largest production nodes and are on track to be the highest volume in company history. Development of next-gen DRAM and NAND is progressing for volume production in H2 CY27. The company is leveraging these nodes and advanced packaging for leadership products like HBM, SOCAM, DDR modules, and data center SSDs.

Global Manufacturing Expansion

Micron is investing in long-term U.S.-based supply assurance for various memory products through fabs in Virginia, Idaho, and New York. Key milestones include initial wafer output from the New York fab in CY2030, ID.1 fab in mid-CY27, ID.2 in late CY28, Japan DRAM fab expansion in late CY28, Taiwan Tonggu facility in mid-CY27, and Singapore HBM advanced packaging facility in early CY27, with a new NAND facility in Singapore by H2 CY28.

Strategic Customer Agreements (SCAs)

Micron has signed 26 SCAs, estimated to cover over 35% of revenue through 2030, with some extending into 2031. Financial commitments from customers have increased to $32 billion, mostly cash deposits. These agreements provide supply assurance, deepen technology collaboration, and enhance financial predictability, with new SCA negotiations reflecting higher prevailing market prices.

Market Outlook and Supply-Demand Dynamics

The company expects memory and storage supply-demand conditions to be much tighter in CY27 and CY28 than in CY26. Industry NAND bit shipments are projected to grow in the low 20s percentage range in CY26 and mid-20s in CY27/28, while DRAM bit shipments are expected to grow mid-20s in CY26 and low 20s in CY27/28. HBM bit shipments are anticipated to grow faster than conventional DRAM through CY28, leading to ongoing supply tightness.

Leadership Appointments and Organizational Structure

Micron announced key leadership appointments to accelerate execution and innovation. Manish Bhatia is now President and COO, overseeing business units and global operations with end-to-end responsibility for demand through supply. Scott DeBoer is President and Chief Technology and Product Officer, leading innovation, technology, and product roadmaps, including Micron Research Labs.

Physical AI and Autonomous Systems

Autonomous vehicles are identified as the first major deployment of physical AI, with expectations for expansion into humanoid robots and other intelligent autonomous systems. These systems require substantially higher performance and power-efficient memory and storage, with memory content in Level 4+ autonomous vehicles exceeding 200GB and storage reaching multiple terabytes, representing a significant demand driver by the end of the decade.

AI-generated summary of the company's earnings call. Not investment advice.