Key points
- Micron beats on revenue and earnings
- Its contract backlog is now about $150 billion
- The guide points to another record quarter
Micron Technology (MU) beat revenue and earnings expectations on Wednesday and disclosed about $150 billion in contracted future revenue.
Fiscal fourth-quarter revenue reached $54.2 billion, up from $11.3 billion a year earlier, while adjusted earnings came to $33.42 a share. Analysts polled by LSEG had expected revenue of $51.07 billion and earnings of $31.61 a share, according to CNBC.
Micron has signed 26 strategic customer agreements, up from 16 in June. The $150 billion represents remaining performance obligations under agreements with qualifying pricing terms, the company said in its prepared remarks.
What's in the $150 billion?
Every agreement has take-or-pay volumes, which means customers pay for committed supply whether or not they take it. But the $150 billion counts only the agreements with a set pricing framework, either a fixed price or a floor and a ceiling. Chief Financial Officer Mark Murphy said it's based on committed volumes and minimum pricing and called it "inherently conservative."
Micron estimates the 26 agreements cover more than 35% of its revenue through 2030. Some now run into 2031. Customers have put up $32 billion in financial commitments, "the vast majority of which are cash deposits," Mehrotra said. Those deposits came to $12.3 billion in the fourth quarter alone, and Micron books them as financing cash flow, not revenue.
We track the figure against other AI suppliers on our AI backlog leaderboard. In June, Micron's third-quarter earnings deck put cumulative revenue at minimum contract prices for 14 of its 16 agreements at about $100 billion. That figure was measured differently, so the two numbers aren't a like-for-like comparison.
What did Micron guide for next quarter?
Micron expects fiscal first-quarter revenue of $61.5 billion, plus or minus $1.5 billion. It guided adjusted earnings to $38.15 a share, plus or minus $1, and adjusted gross margin to about 86.25%. That margin would be a little below the 87% it reported for the fourth quarter.
For fiscal 2026, which ended Sept. 3, revenue reached $133.2 billion, up 256% from the year before. Adjusted earnings per share rose 811% to $75.52.
"As strong as fiscal 2026 was, we expect fiscal 2027 to be even better," Chief Executive Sanjay Mehrotra said in the prepared remarks. "Industry demand has strengthened since our last earnings call, and we expect memory and storage supply-demand conditions to be much tighter in fiscal 2027 and 2028 than they were in 2026."
Is Micron spending more to catch up?
Yes. Mehrotra said Micron doesn't have "line of sight to when supply and demand will return to balance," and it plans to raise fiscal 2027 capital spending above prior plans. Murphy projected about $11.5 billion for the first quarter and roughly $25 billion for the first half, with more in the second half. Most of the increase goes to construction, to add cleanroom space from late calendar 2028.
Micron's capacity expansion will come in stages. Its first Idaho fab is expected to produce output in mid-calendar 2027, the second in late calendar 2028, and the New York site in calendar 2030. Micron also said it has agreements for the vast majority of its calendar 2027 HBM supply, with significant price increases from this year.
How did the stock react?
Micron closed Wednesday's regular session at $1,068.95, up 0.4%. Shares swung in extended trading, from about $1,083 at 4:21 p.m. ET to $1,057.63 at 5:45 p.m. ET, down 1.1% from the close.
Ahead of earnings, we examined Micron and Nvidia's contribution to S&P 500 profit growth. Our memory stocks comparison looks at how Micron compares with SK Hynix, Samsung, and Sandisk.
