The memory maker reported $54.23 billion of quarterly revenue and guided to $61.5 billion. Gross margin guidance of 86.25% sits slightly below Wall Street's view after a record pay increase, and capital spending will rise.
By the usual measures, Micron Technology's quarter was a blowout. The stock treated it as roughly what investors had expected.
Revenue for the fiscal fourth quarter, which ended Sept. 3, came to $54.23 billion, up from $41.46 billion the prior quarter and $11.32 billion a year earlier, or about 4.8 times. Analysts had expected about $51 billion. Adjusted earnings were $33.42 a share, against estimates of about $31.83, and GAAP earnings $32.87. The company had guided to $50.0 billion, which it beat by about 8.5%.
For the current quarter, Micron forecast revenue of $61.5 billion, plus or minus $1.5 billion, against expectations near $57 billion. That implies sequential growth of about 13%. Adjusted earnings are guided at $38.15 a share, plus or minus $1.
Ahead of the report, options prices implied a move of about 7% in either direction. On Thursday the stock traded between a decline of about 1% in the morning and a gain of about 1.2% in the afternoon, near $1,078. Micron shares have risen about 271% this year.
The margin line
Micron guided adjusted gross margin to about 86.25%, a touch below analyst expectations, after a record increase in employee pay for the quarter.
"Commensurate with our record quarter, we rewarded our team members in a record fashion, as well," Chief Executive Sanjay Mehrotra said Thursday. "It does impact our gross margin, but we guided to a very strong gross margin of 86.25%."
Spending more
Micron also said it will raise fiscal 2027 capital spending above prior plans. "Given the need for DRAM cleanroom space and supported by greater visibility from SCAs into our demand through the end of the decade and beyond, we plan to increase our capex in fiscal 2027 versus prior plans," Mehrotra said, referring to long-term supply agreements with customers, without putting a figure on the increase. Net capital spending was $10.77 billion in the fourth quarter and $27.37 billion for the year.
The cash is there. Operating cash flow was $43.97 billion in the quarter and adjusted free cash flow $33.20 billion. Micron ended the period with $73.48 billion in cash and investments.
Where the revenue came from
Core data-center memory brought in $18.00 billion, cloud memory $16.28 billion, mobile and client $13.11 billion, and automotive and embedded $6.82 billion. NAND flash revenue rose about 42% on prices up roughly 30%, according to Citi analysts, who raised their price target on Sandisk to $2,100 on the read-through.
Two readings
One reading is that the stock's calm reflects a beat that was already priced into a 271% rally, and that a guide 13% above a record quarter keeps the earnings trajectory intact.
A second reading is that the capex increase is the start of a supply response. Higher spending on cleanroom space, with margins guided slightly below expectations, raises the question of how long pricing near current levels can last.
What decides it
The fiscal 2027 capex figure, when Micron gives it, is the number investors lack. Contract pricing commentary over the next quarter, and whether the 86.25% margin holds once the pay increase is absorbed, will show whether the market's muted reaction was caution or fatigue.