Micron Technology, Inc. · Q3 FY2026 call

Demonstrating Micron’s position as a leader enabling the AI era, our data center revenue exceeded $25 billion in fiscal Q3 or an annualized run rate of over $100 billion. Our data center SSD revenue exceeded $5 billion, more than doubling sequentially.

Even as we expect industry supply to improve gradually in 2028, we currently do not have line-of-sight as to when memory supply will be able to catch up with increasing demand.

The 16 signed agreements represent roughly 20% of our DRAM volume and a third of our NAND volume over this period. These SCAs include four very large customers and three medium-sized customers.

For our SCAs with price bands, the floor price enables a very robust gross margin for Micron, well above our peak quarterly margins in any past cycle. 14 of the 16 SCAs that we have signed have accumulative revenue at minimum price per our contracts of approximately $100 billion over the remaining agreement term.

RPO is determined based on minimum committed volumes and minimum pricing, and reflects inherently conservative estimates. RPO is not indicative of the total revenue we expect to recognize in future periods.

Total fiscal Q3 revenue was $41.5 billion, up 74% sequentially and up 346% year-over-year, representing our fifth consecutive quarterly revenue record. The $17.6 billion sequential increase is the largest in our history, eclipsing last quarter’s $10.2 billion record.

The consolidated gross margin for fiscal Q3 was 84.9%, up 10 percentage points sequentially. This improvement was driven primarily by higher pricing and also benefited from continuing strong execution and favorable mix.

During fiscal Q3, we reduced debt by $4.4 billion, including a cash tender offer that reduced senior notes by $4.3 billion. […] We closed the quarter with $5.7 billion of debt and a net cash balance of $24.4 billion.

We expect fiscal Q4 revenue to be a record $50 billion, plus or minus $1 billion. Gross margin to be approximately 86%. […] Our fiscal Q4 gross margin outlook reflects a meaningful moderation in the rate of price increases.

In fiscal Q4, we project capex of around $10 billion, bringing full-year fiscal 2026 capital spending to approximately $27 billion. We expect quarterly capex in fiscal 2027 to be above fiscal Q4 levels

From December 9, 2026, the second anniversary of the signature of our definitive chips agreements, we intend to increase our capital return. Over time, we expect to return 100% of our excess cash to shareholders.

It’s not a prepayment. It’s a separate commitment by the customers and a reflection of the fact that we have a binding agreement and these are take-or-pay agreements, and we hold the cash and it’s a reflection of our shared commitment to perform under these agreements.

HBM market share, we strategically are choosing it to be close to our DRAM share. And this is important because of the trade ratio of HBM. It consumes, as you know, a significant amount of wafers and puts pressure on non-HBM supply in the industry.

We see 2027 overall tight. We have said we see tightness continuing beyond 2027 and working hard to bring up supply, but we have shared with you that it takes a long time to bring up the additional capacity that is needed to support the customer demands