Micron Technology, Inc.
MU · Nasdaq
Next quarter
Reports Sep 30, 2026, after the close.
Consensus is $31.17 EPS for Aug 2026 across 10 estimates, ranging $30.38 to $32.09.
MU May 2026
- 18.64%
- +15.74%
- $20.98
- $24.89
- —
- $41.46B
Reported results
- $41.46B
- 84.56%
- $33.32B
- 80.37%
- $28.24B
- $24.67
Highlights
- Record quarter: Fiscal Q3 revenue was $41.46 billion, up 74% sequentially and 346% year over year, while GAAP net income reached $28.24 billion, or $24.67 diluted EPS.
- Earnings beat: EPS was $24.89 versus the supplied consensus of $20.98, an 18.64% surprise; Micron's release reports $24.67 GAAP diluted EPS and $25.11 non-GAAP diluted EPS.
- AI-driven pricing: DRAM revenue rose 67% sequentially on a low-60% increase in average selling prices and low-single-digit bit growth; NAND revenue rose 99% on mid-80% pricing growth and mid-single-digit bit growth.
- Margin expansion: Gross margin increased to 84.6% from 74.4% in Q2 FY2026 and 37.7% a year ago, while operating margin reached 80.4% versus 67.6% and 23.3%, respectively.
- Data-center strength: Cloud Memory revenue was $13.77 billion and Core Data Center revenue was $11.52 billion; their operating margins were 78% and 83%, respectively.
- Stronger outlook: Micron guided to fiscal Q4 revenue of $50.0 billion plus or minus $1.0 billion, approximately 86% gross margin and non-GAAP EPS of $31.00 plus or minus $1.00.
- Contracted demand: Strategic customer agreements created approximately $5 billion of remaining performance obligations at quarter-end, with about one-third expected to be recognized over the next 12 months; agreements concluded to date are expected to generate $22 billion of commitments, including $18 billion in cash deposits.
- Cash generation and investment: Q3 operating cash flow was $25.39 billion and adjusted free cash flow was $18.30 billion, against $7.08 billion of net capital expenditures; cash and marketable investments ended at $30.13 billion.
- HBM and capacity: HBM4 entered high-volume shipments for the lead customer's platform, while Micron expects HBM4E volume production in calendar 2027 and estimates fiscal 2026 net capital expenditures of approximately $27 billion.
Analysis
Micron's fiscal third quarter was a sharp acceleration in an already improving memory cycle, led by AI-related data-center demand and pricing rather than merely bit-volume growth. Revenue of $41.46 billion increased 74% from $23.86 billion in Q2 and 346% from $9.30 billion a year ago. GAAP net income rose to $28.24 billion from $13.79 billion sequentially and $1.89 billion year over year. The supplied earnings dataset shows EPS of $24.89 versus $20.98 consensus, an 18.64% beat; the company reported $24.67 GAAP diluted EPS and $25.11 non-GAAP EPS.
The defining feature was operating leverage: gross margin expanded to 84.6% from 74.4% last quarter and 37.7% last year as DRAM and NAND prices surged amid constrained supply. All four business units grew sequentially, with Core Data Center revenue up 103% and Mobile and Client up 49%. Micron also shifted toward greater earnings visibility through take-or-pay strategic customer agreements, while simultaneously committing to record technology, packaging and fab investment. The fiscal Q4 outlook of $50.0 billion revenue, approximately 86% gross margin and $31.00 non-GAAP EPS implies further sequential growth and margin expansion.
AI memory cycle
Micron attributed the quarter's pricing and margin gains to AI-driven data-center demand growing faster than industry supply. The result was broad-based across DRAM and NAND, with average selling prices doing most of the work.
- DRAM: Revenue was $31.33 billion, up 67% sequentially and 343% year over year. Sequential growth reflected a low-60% increase in average selling prices and low-single-digit bit-ship growth.
- NAND: Revenue was $9.94 billion, up 99% sequentially and 361% year over year. Average selling prices increased in the mid-80% range sequentially, with bit shipments up in the mid-single-digit range.
- Supply conditions: Micron said demand exceeded its ability, and the industry's ability, to increase supply, forcing allocation decisions across customers and end markets.
Strategic customer agreements
The quarter also marked a move to make Micron's historically cyclical memory business more contracted. The agreements are take-or-pay arrangements with multi-year volume commitments; most include fixed pricing or price floors and ceilings, although a minority remains market-priced.
- Contract visibility: Remaining performance obligations were approximately $5 billion at May 28, compared with an immaterial amount a year earlier. About one-third is expected to convert to revenue within 12 months.
- Customer funding: Agreements concluded to date are expected to generate $22 billion of commitments, including approximately $18 billion in cash deposits. Customer deposits already included in contract liabilities were $422 million.
- Margin protection: Micron said agreements with price bands should produce gross margins above the company's peak quarterly margins in prior cycles even at floor pricing, potentially reducing exposure to the usual memory downcycle.
Fourth-quarter outlook
Management expects momentum to continue into fiscal Q4, which contains 14 weeks. The forecast points to another large sequential increase in revenue and a modest expansion from an already exceptional margin profile.
- Revenue: $50.0 billion plus or minus $1.0 billion, compared with $41.46 billion in Q3.
- Profitability: GAAP and non-GAAP gross margin are both expected to be approximately 86%, versus 84.6% GAAP in Q3.
- EPS: GAAP diluted EPS is guided to $30.73 plus or minus $1.00, while non-GAAP diluted EPS is guided to $31.00 plus or minus $1.00.
- Investment: Fiscal 2026 net capital expenditures are expected to be approximately $27 billion as Micron expands wafer, advanced packaging and R&D capacity.
Business unit performance
Growth was not limited to HBM or the largest cloud customers. Every reported business unit posted sequential revenue growth, although data-center businesses delivered the strongest acceleration and highest operating margins.
- Cloud Memory: Revenue was $13.77 billion, up 78% sequentially; operating margin was 78%, versus 66% in Q2 and 46% a year ago.
- Core Data Center: Revenue was $11.52 billion, up 103% sequentially; operating margin was 83%, versus 67% in Q2 and 20% a year ago.
- Mobile and Client: Revenue was $11.52 billion, up 49% sequentially; operating margin was 86%, versus 76% in Q2 and 15% a year ago. Lower bit shipments partially offset pricing gains.
- Automotive and Embedded: Revenue was $4.63 billion, up 71% sequentially; operating margin was 75%, versus 62% in Q2 and 11% a year ago.
Cash and capacity
The earnings surge translated into substantial cash generation, giving Micron room to fund capacity expansion and reduce leverage while maintaining shareholder returns. The balance sheet also reflects the working-capital demands of the rapid revenue ramp.
- Cash flow: Q3 operating cash flow was $25.39 billion, up from $11.90 billion in Q2 and $4.61 billion a year ago. Adjusted free cash flow was $18.30 billion.
- Capital spending: Net capital expenditures were $7.08 billion in Q3; nine-month property, plant and equipment spending was $19.60 billion, partially offset by $2.99 billion of government incentives.
- Liquidity and debt: Cash, cash equivalents and marketable investments totaled $30.13 billion at quarter-end, while debt carrying value was $5.72 billion after $8.48 billion of debt prepayments during the first nine months.
- Shareholder returns: Micron declared a $0.15 quarterly dividend payable July 21. It repurchased no shares under the authorization in Q3 and had $2.16 billion remaining under the $10 billion program.
Product and fab roadmap
Micron is using the favorable cycle to accelerate its technology and manufacturing roadmap. Current product milestones support the near-term HBM ramp, while new fabs and packaging facilities address expected demand later in the decade.
- HBM: HBM4, based on 1-beta DRAM, entered high-volume shipments for the lead customer's platform; qualification samples have gone to multiple additional end customers. HBM4E, based on 1-gamma DRAM, is in development with volume production expected in calendar 2027.
- Storage: The G9-based PCIe Gen6 high-performance SSD and 245TB QLC SSD entered high-volume production, while Gen5 QLC client SSD qualification was completed with a lead customer.
- Capacity additions: Micron expects first wafer output from its Boise fab in mid-2027, initial shipments from the acquired Taiwan fab in mid-2027 and meaningful additional Singapore HBM packaging capacity beginning in the first half of calendar 2027.
- Execution risk: The filing continues to identify memory price volatility, AI-demand uncertainty, geopolitical exposure, customer concentration and the risk that new capacity fails to ramp on schedule as material risks to the outlook.
