Transcript: Micron Technology Q4 2026 Earnings Conference Call

Micron Technology (NASDAQ: MU ) held its fourth-quarter earnings conference call on Wednesday. Below is the complete transcript from the call. APIs provide real-time access to earnings call transcripts and financial data. Visit to learn more.

View the webcast at Summary Micron Technology reported exceptional fiscal Q4 2026 results, with revenue, gross margin, and EPS exceeding guidance, driven by strong data center and DRAM performance. The company expects fiscal 2027 to surpass fiscal 2026, with tighter memory and storage supply-demand conditions due to growing AI applications across various platforms. S. -based supply for key products.

Strategic customer agreements (SCAs) have been expanded, now covering 35% of revenue through 2030, providing supply assurance and predictable financial performance. 2 billion, a 256% increase year over year, with significant contributions from DRAM and NAND segments. Micron plans to increase capital expenditures in fiscal 2027 to address supply constraints and is focused on disciplined investment to ensure adequate returns. Management highlighted leadership changes to enhance execution and innovation, with key appointments in business operations and technology development roles.

Full Transcript OPERATOR Hello everyone. Thank you for joining us and welcome to Micron Technology fourth quarter 2026 financial call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand.

To withdraw your question, press star one again. I will now hand the conference over to Satya Kumar, Corporate Vice President, Investor Relations and Treasury. Satya, please go ahead. Satya Kumar, Corporate Vice President, Investor Relations and Treasury Thank you and welcome to Micron Technology fiscal fourth quarter 2026 financial conference call.

On the call with me today are Sanjay Mehrotra, our Chairman and CEO, and Mark Murphy, our CFO. com, including audio and slides. In addition, the press release detailing our quarterly results has been posted on the website along with prepared remarks for this call. Today's discussion contains forward-looking statements that are subject to risks and uncertainties.

These forward-looking statements include statements regarding our future financial and operating performance and our business model, as well as trends and expectations in our business, customers, market, industry, products and regulatory and other matters. These statements are based on our current assumptions and we assume no obligation to update these statements. Please refer to our most recent financial reports on Form 10-K, Forms 10-Q and our other filings with the SEC for more information on the risks and uncertainties that could cause actual results to differ materially from expectations.

Today's discussion of financial results is presented on a non-GAAP financial basis unless otherwise specified. A reconciliation of GAAP to non-GAAP financial measures can be found on our website. I'll now turn the call over to Sanjay. Sanjay Mehrotra — Chairman, President & CEO Thank you, Satya.

Micron delivered an exceptional fiscal Q4 with significant records in revenue, gross margin, and EPS, each exceeding the high end of our guidance. Fiscal 2026 was an outstanding year. Revenue was three and a half times last year's record, with data center revenue up fourfold. Micron's DRAM revenue for the fiscal year 2026 surpassed $100 billion.

I'm thankful for the above-and-beyond efforts of our employees around the world that made these extraordinary results possible. In recognition of these efforts and Micron's strong execution, we increased fiscal 2026 incentive compensation for every global team member, reinforcing our performance-driven culture and aligning team member success with long-term shareholder value creation. As strong as fiscal 2026 was, we expect fiscal 2027 to be even better. 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.

AI is becoming super intelligence, and memory enhances this intelligence and the competitiveness of our customers' platforms. AI applications across end markets, whether using open source or closed source models, are run on a variety of competing customer platforms. These platforms all share one important characteristic: their value proposition is enhanced by the performance and capacity of memory and storage. Running an AI application on a platform with greater memory capability enables more scalable growth in usage, improves the end-user experience, and increases the value users get from AI applications.

The strategic importance of memory to our customers also provides greater differentiation opportunities for Micron than at any time in our history as we address AI-driven demand for an increasingly complex set of products. S. We also have opportunities for richer product mix relative to our competitors with our focus on higher value solutions. Micron's technology leadership, strong product portfolio, strategic customer agreements, and manufacturing excellence position us to capitalize on these opportunities.

Micron is the industry's technology leader. Our 1-gamma DRAM node and G9 NAND nodes are our largest production nodes today and are on track to become the highest-volume nodes in Micron's history. Development of our next-generation DRAM and NAND technology nodes is also progressing well, and they are on track to begin volume production in the second half of calendar 2027. We are leveraging these technology nodes and our advanced packaging capabilities to deliver leadership products across the memory hierarchy such as industry-leading HBM, high-capacity and high-performance DDR modules, and data center SSD products.

We are focused on our global manufacturing expansions to help address customer demand growth through the end of this decade and beyond. -based supply assurance for DDR, LPDRAM, and HBM products through our fabs in Virginia, Idaho, and New York to support our customers across a variety of markets including data center, PC, mobile, automotive, aerospace and defense, medical, humanoid robotics, and other industrial and consumer markets. During the last quarter we celebrated a concrete-pour milestone for our first New York fab, with initial wafer output expected in calendar 2030.

Our ID1 fab is on track to commence wafer output in mid-calendar 2027, and ID2 is on track to commence wafer output in late calendar 2028. In fiscal Q4, we held a groundbreaking ceremony for our DRAM fab expansion in Japan, with initial output expected in late calendar 2028. To support technology node transitions in Taiwan, we are on track for meaningful product shipments from our Tongluo facility in mid-calendar 2027. In Singapore, clean-room preparation is ahead of plan at our HBM advanced packaging facility, with initial output expected in early calendar 2027.

Also, construction is on track for our new NAND facility in Singapore to begin output in the second half of calendar 2028. Production from new DRAM and NAND fabrication facilities takes time to ramp and gradually becomes more meaningful starting a few quarters after initial output. Micron's strategic customer agreements accelerate the transformation of our business. These multi-year take-or-pay agreements sharpen our long-term supply planning and enhance the durability and predictability of our strong financial performance.

Further, they provide our customers supply assurance and deepen technology roadmap collaboration. This in turn helps our customers invest more confidently in their business and enables their end consumers to benefit from their products and services. To date, we have signed 26 SCAs, which we currently estimate to be over 35% of our revenue through 2030. Three quarters of this estimated revenue has a defined pricing framework, a majority of which have pricing bands with floor and ceiling prices.

The remaining quarter of this SCA revenue expectation has pricing negotiated periodically based on market prices. Customers want SCA-assured supply beyond 2030, and we have now signed SCAs that extend into 2031 as well as one-year extensions to 2031 for two agreements. Any new discussions on SCAs where pricing is involved are negotiated with higher pricing based on prevailing market conditions and outlook. For the 26 signed SCAs and extensions, financial commitments from customers have increased to $32 billion, the vast majority of which are cash deposits.

These financial commitments reflect our customers' confidence in their long-term demand for memory and storage. Turning to our end markets, please see our earnings press release for highlights. Across our high-capacity DDR and LP server DRAM, data center SSD, PC, smartphone, and physical AI product portfolios, we expect server unit growth in the high-teens percentage range in both calendar 2026 and 2027. This strong server unit growth is supported by a modestly lower rate of content growth than prior expectations amid tight memory supply.

Growing model parameter size, longer context lengths, and higher concurrency continue to increase the memory and storage content required to execute AI workloads efficiently. Micron is leveraging our technology leadership and manufacturing excellence to deliver innovative products across the memory hierarchy to data center customers. In HBM, our revenue for fiscal Q4 2026 grew faster than total company revenue in the quarter as we ramp HBM shipments across a growing number of customers.

We have completed agreements for the vast majority of our calendar 2027 HBM bit supply with significant price increases year over year, narrowing the gross margin gap with conventional DRAM. We continue to execute well on our ramp of HBM4. We have a strong roadmap for future HBM products and are proud to be working with NVIDIA on the industry's first custom HBM4E implementation, NVHVM, to be adopted on next generation GPUs and NVLink Fusion platforms. In NAND, AI context memory storage used for KV cache offload and HDD displacement opportunities are expanding the addressable market for SSDs.

Data center SSD revenue in fiscal Q4 was nearly $10 billion, more than 10 times the year-ago quarter, and was over two-thirds of total company NAND revenue. We are on track to deliver the fifth consecutive year of record market share in data center SSD in calendar 2026. This performance is driven by the strength of our NAND technology leadership, end-to-end data center storage portfolio, and close collaboration with customers, which has resulted in design wins across the largest data center deployments. PC and mobile industry revenue remain on track to grow this calendar year, driven by strength at the premium end of the market.

Despite potential double-digit overall unit declines in both markets, OEMs continue to introduce new AI capabilities in flagship PCs and smartphones, driving robust demand for higher-performance devices with increased DRAM and NAND content. Micron is focused on these premium segments and is well positioned to support customers as they expand edge AI capabilities with our industry-leading memory and storage portfolio. Nearly half of MCBU revenue in fiscal Q4 was generated by 1-gamma products as customers accelerate qualifications and adopt our latest technology, which delivers lower power consumption and higher performance.

Autonomous vehicles are the first major deployment of physical AI, which we believe will expand over time to humanoid robots and other intelligent autonomous systems. These increasingly complex systems require substantially higher-performance and more power-efficient memory and storage to operate in real time. Memory content in Level 4 and higher autonomous vehicles typically exceeds 200 gigabytes, while storage content reaches multiple terabytes, each more than an order of magnitude greater than in today's Level 2+ and Level 3 semi-autonomous vehicles. Humanoid robots are expected to have comparable memory and storage requirements to autonomous vehicles.

With the anticipated increase in both units and memory content, physical AI can become a significant driver of memory and storage demand by the end of this decade. Several physical AI customers are sampling our next-generation products, and we are increasing investments in our technology roadmap to ensure we are prepared to capitalize on this opportunity. Now turning to market outlook, we expect memory and storage supply-demand conditions to be much tighter in calendar 2027 and 2028 than they were in 2026. In NAND, for calendar 2026, we expect industry bit shipments to grow in the low-20s percentage range, slightly above our prior expectations.

We expect Micron NAND supply to grow less than industry supply growth in calendar 2026. For calendar 2027 and 2028, we expect industry NAND bit shipments to grow approximately in the mid-20s percentage range and the industry to remain supply constrained in both years. In DRAM, for calendar 2026, we expect industry bit shipments to grow in the mid-20s percentage range. We expect Micron DRAM supply to grow approximately in line with industry supply growth.

For calendar 2027 and 2028, we expect industry DRAM bit shipments to grow approximately in the low-20s percentage range and the industry to remain supply constrained in both years. We expect industry HBM bit shipments to grow faster than conventional DRAM through calendar 2028. The structural gap between DRAM supply and demand growth rates is resulting in ongoing supply tightness, and clean-room additions are required to augment node-transition supply growth and help narrow the gap.

Even with additional industry DRAM clean-room space plans, with robust demand trends, including new upside requests from customers, we do not have line of sight to when supply and demand will return to balance. Given the need for DRAM clean-room 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. A majority of the increase is for construction CapEx, most of which is to help accelerate clean-room space availability in late calendar 2028 and beyond.

We are also working to optimize production from available clean-room space, which is resulting in some pull-forward of equipment spending. Mark will provide more details on CapEx. As we make these clean-room space investments, we will remain disciplined in our approach and anticipate ramping equipment capacity appropriately with our demand in the market environment. Further accelerate execution and innovation across the company.

Last month we announced leadership appointments. Manish Bhatia has been appointed to President and Chief Operating Officer and Scott DeBoer has been appointed to President and Chief Technology and Products Officer. Manish leads Micron's business units and global operations with accountability for our operating P&L. In his role as COO, Manish has end-to-end responsibility for demand through supply, enabling faster, more integrated decision-making and stronger alignment across the organization to meet our customers' evolving needs.

Scott leads Micron's Innovation, Technology and Products organization. In his role as Chief Technology and Products Officer, Scott is responsible for advancing Micron's industry-leading memory and storage roadmaps, accelerating innovation to meet customers' rapidly evolving requirements, and overseeing Micron Research Labs, a global flagship research hub dedicated to breakthrough memory and compute technologies. I'll now hand it over to Mark for our fiscal Q4 financial results and outlook. Mark Murphy — Executive Vice President & Chief Financial Officer Thank you, Sanjay, and good afternoon, everyone.

Micron delivered exceptional results to close out the fiscal year with fiscal Q4 revenue, gross margin, and EPS all exceeding the high end of our guidance. 2 billion, up 256% year over year. 52. To date we have signed 26 SCAs in total and our remaining performance obligations, or RPO, is approximately $150 billion.

All SCAs have take-or-pay contracted volumes, and RPO reflects the contract value for only SCAs that have a determined pricing framework, which can be either a fixed price or subject to a pricing floor and ceiling. RPO is based on committed volumes and minimum pricing and is inherently conservative. As mentioned in our last earnings call, even at floor prices we expect margins meaningfully above any prior cycle peak margins. We expect revenue to well exceed the associated RPO over the terms of the agreements.

2 billion, up 31% sequentially and up 379% year over year. Fiscal Q4 revenue was our sixth consecutive quarterly revenue record. 8 billion, up 343% year over year and represented 73% of total revenue. Sequentially, DRAM revenue increased 27%.

Bit shipments were up mid-single-digit percentage range. Prices increased high-teens percentage range driven by tight DRAM industry conditions.