Earnings Recap — Q4 FY2026
CY Q3 2026 · Reported September 30, 2026 · Beat 7 of last 7 quarters
Micron Technology, Inc. reported Q4 FY2026 revenue of $54.23B, a beat of 5.6% against consensus, and EPS of $33.42, a beat of 5.2%.
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Management's characterization that DRAM is the principal constraint versus logic or power to the data center frames memory as a gating factor for the AI infrastructure buildout, with more than 75% of fiscal 2027 shipments already committed and allocation discussions extending into 2028. The construction-heavy CapEx plan, where the majority of the fiscal 2027 increase funds clean rooms that only come online in late 2028 and beyond, suggests supply relief is years away, which could keep system memory content constrained while latent demand builds. Significantly higher HBM pricing for calendar 2027 may add to accelerator bill-of-materials pressure as HBM trade ratios rise through HBM4 and HBM4E.
Micron signed 10 new strategic customer agreements in the quarter, bringing the total to 26, covering both DRAM and NAND through 2030, with DRAM volume under the agreements approximately 35% and NAND bit volume slightly higher. Management said more than 75% of fiscal 2027 shipments are committed, which has allowed allocation discussions with customers to extend into 2028. The company said it has increased HBM pricing significantly for calendar 2027, resetting at the start of the calendar year to narrow the profitability gap with conventional DRAM, and that its 1-gamma DRAM node is already the majority of its bits and is set up to be the largest node in company history, with 1-delta ramping in the second half of next year. Micron is co-designing HBM4E — described as the first major custom HBM product — with NVIDIA on what is called NV HBM, and said its technology leadership is at least two nodes ahead of China competition while China exposure falls to the single-digit range in fiscal 2027. Mobile and client saw a second consecutive quarter of sequential bit declines, though revenue grew on pricing and favorable mix.
Management said it continues to see tight supply and demand through calendar 2027 and 2028, stating they have no line of sight to when supply and demand balance, citing HBM growing faster than conventional DRAM, rising HBM trade ratios across HBM3 to HBM4 to HBM4E, diminishing bit growth from each technology node, and clean room space as the principal industry constraint. CFO Mark Murphy said fiscal 2027 should see margin expansion relative to Q1 from continued but more moderate price increases plus a better product mix, partially offset by start-up costs. For fiscal Q1 2027, guidance factors in single-digit sequential bit growth and double-digit cost increases for both DRAM and NAND. The majority of the increase in fiscal 2027 construction CapEx versus prior plans is for clean rooms coming online in late 2028 and beyond, with capacity to be equipped in line with demand and long-term supply agreements already in place with equipment suppliers. R&D is expected to increase by more than $1 billion year over year in fiscal 2027 as additional R&D activities have been added. Management also said SCA negotiations now include extensions beyond 2030 and that SCA volumes could rise from here.
“as we've gone through working on our fiscal year '27 and we commented that we have more than 75% of our shipments committed for the year that shows a strengthening demand and allows us to shift our conversations on allocation with our customers out to 2028.”
on Demand visibility
“We made the statement that we really don't have line of sight to when supply and demand balances.”
on Supply-demand balance
“we had indicated for the balance of the year that we would see margin expansion relative to Q1 a function of continued price increases, albeit at a more moderate pace.”
on Margin trajectory
Can you address CapEx and the fab construction CapEx compared to tool purchases? The construction CapEx increase doesn't result in bit production until at least '29.
Manish Bhatia said the principal industry constraint is clean room space because the AI demand vector has arrived relatively recently versus the timeline to build clean rooms, and confirmed that the majority of the fiscal 2027 construction CapEx increase versus prior plans is for clean rooms that come online in late 2028 and beyond, which shows both how long construction takes and confidence in longer-term demand. Mark Murphy added that the construction increase is meant to accelerate clean room space availability in 2028 and beyond, that the spend does not translate into bits, and that equipment will be added when needed based on the market and the SCAs. Bhatia noted Micron has long-term supply agreements with equipment suppliers but will build production capacity in those clean rooms in line with demand trends.
Of the 10 new SCAs signed, is there any change in the pricing construct customers are asking for — are you less inclined to call for fixed ceiling and floor pricing given expected tightness in calendar '27 and '28?
Bhatia said the framework is similar but negotiations now reflect current market conditions and the outlook for pricing, with the direction of travel toward higher pricing versus the prior SCAs set at CQ2 market conditions. About three-quarters of SCA revenue has a defined pricing framework and about one quarter is open to periodic negotiations or pricing that moves with market dynamics. The majority of pricing frameworks have floor and ceiling bands, and the newer ones are negotiated with an eye toward current market conditions and future market tightness. The 10 new agreements ranged from small to large customers and are not broken out by customer type.
Supply growth is expected to decelerate next year, which is surprising given the CapEx — can you explain the puts and takes, principally in DRAM?
Bhatia attributed the deceleration to HBM growing faster than conventional DRAM and rising trade ratios as the industry shifts from HBM3 to HBM4 and toward HBM4E later in 2027, plus the timing and diminishing returns of new technology node transitions. He said clean room space is the principal constraint for everyone, and that even with first wafer output from Micron's Idaho facility in mid-calendar 2027 and other industry clean rooms opening, meaningful supply growth takes a few quarters after that. In response to a follow-up, he agreed there is latent demand, saying customers are maximizing compute silicon shipments with available memory supply and that more memory would be put to use in higher content growth in AI workloads, whether attached to accelerators or CPUs.