Sign in

You're signed outSign in or to get full access.

MT

MICRON TECHNOLOGY INC (MU)·Q4 2025 Earnings Summary

Executive Summary

  • Record Q4: Revenue $11.32B, GAAP EPS $2.83, non-GAAP EPS $3.03; gross margin 44.7% GAAP/45.7% non-GAAP, operating margin 32.3% GAAP/35.0% non-GAAP .
  • Consensus beat: Revenue $11.32B vs $11.16B estimate; non-GAAP EPS $3.03 vs $2.86 estimate; FY25 non-GAAP EPS $8.29 vs $8.09 estimate; FY25 revenue $37.38B vs $37.21B estimate [Values retrieved from S&P Global]* .
  • Guidance: Q1 FY26 revenue $12.50B ±$300M; non-GAAP gross margin 51.5% ±1.0%; non-GAAP EPS $3.75 ±$0.15; sequential revenue growth and margins exceeding 50% .
  • Key catalyst: Tight DRAM market, HBM scale-up, and favorable mix into data center; management expects further margin expansion into November quarter amid constrained industry supply and improved pricing .

What Went Well and What Went Wrong

What Went Well

  • AI-led data center strength and HBM scale: “HBM and high-capacity DIMMs and LP… were $10B in fiscal 2025… very large part of our revenue” with robust ROI and stable long-lead demand characteristics .
  • Gross margin inflection above 50% trajectory: Q4 reported GM above mid-FY22 levels; operating margin highest since Nov 2018; mix shift to DRAM/data center and price execution drove margin outperformance vs mid-Aug update .
  • One-gamma DRAM ramp: Achieved mature yields and first revenue shipments; 1-gamma and 1-beta now majority of bit output, underpinning DRAM supply growth in FY26 .

What Went Wrong

  • NAND remains challenging: Bits down in FQ4 due to mix noise; industry improving but still behind DRAM; Micron maintains structurally lower wafer outs, slower node transitions, and low CAPEX; inventories in NAND still less healthy than DRAM .
  • Managed NAND exit: Micron exited mobile managed NAND due to weak ROI despite strong DRAM relationships; customers not happy but transitions underway .
  • FX/startup cost headwinds: Beginning to rise into FY26 (Idaho fab ramp, FX) but mitigated by stronger revenue outlook and pricing; margin impact smaller than prior expectations .

Financial Results

Headline Results vs Prior Periods and Consensus

MetricQ4 2024Q3 2025Q4 2025Consensus (Q4 2025)*
Revenue ($B)$7.75 $9.30 $11.32 $11.16*
Gross Margin % (GAAP)35.3% 37.7% 44.7% —
Gross Margin % (Non-GAAP)36.5% 39.0% 45.7% —
Operating Margin % (GAAP)19.6% 23.3% 32.3% —
Operating Margin % (Non-GAAP)22.5% 26.8% 35.0% —
Diluted EPS (GAAP)$0.79 $1.68 $2.83 —
Diluted EPS (Non-GAAP)$1.18 $1.91 $3.03 $2.86*
  • Beat/miss: Revenue and non-GAAP EPS both beat consensus for Q4; similarly, Q3 and Q2 were beats on revenue and EPS [Values retrieved from S&P Global]* .

Cash Flow and Liquidity KPIs

MetricQ4 2024Q3 2025Q4 2025
Operating Cash Flow ($B)$3.41 $4.61 $5.73
Investments in Capex, net ($B)$(3.08) $(2.66) $(4.93)
Adjusted Free Cash Flow ($B)$0.323 $1.949 $0.803
Cash & Marketable Investments ($B)$8.11 (Cash $7.04 + ST inv $1.07) $10.81 (Cash $10.16 + ST inv $0.65) $10.31 (Cash $9.64 + ST inv $0.67)
Dividend per Share ($)—$0.115 $0.115

Business Unit Performance

SegmentRevenue ($B)Revenue ($B)Revenue ($B)GM %GM %GM %OM %OM %OM %
Q4 2024Q3 2025Q4 2025Q4 2024Q3 2025Q4 2025Q4 2024Q3 2025Q4 2025
Cloud Memory BU$1.45 $3.39 $4.54 49% 58% 59% 33% 46% 48%
Core Data Center BU$2.05 $1.53 $1.58 41% 38% 41% 27% 20% 25%
Mobile & Client BU$3.02 $3.26 $3.76 32% 24% 36% 20% 15% 29%
Automotive & Embedded BU$1.23 $1.13 $1.43 24% 26% 31% 11% 11% 20%

Non-GAAP Adjustments

  • Q4 non-GAAP EPS adds $0.20 vs GAAP; adjustments include stock-based comp, restructure/impairments, debt prepayment loss, and tax effects .
  • Q4 adjusted free cash flow $0.803B; reconciliation items include capex, proceeds from government incentives ($711M) .

Guidance Changes

MetricPeriodPrevious GuidanceUpdated GuidanceActual/CurrentChange
Revenue ($B)Q4 2025$10.7 ± $0.3 $11.2 ± $0.1 $11.315 Raised then beat
Gross Margin % (Non-GAAP)Q4 202542.0% ± 1.0% 44.5% ± 0.5% 45.7% Raised then beat
OpEx ($B, Non-GAAP)Q4 2025$1.20 ± $0.02 $1.22 ± $0.015 $1.214 Slight raise, in-line
Diluted EPS (Non-GAAP, $)Q4 2025$2.50 ± $0.15 $2.85 ± $0.07 $3.03 Raised then beat
Revenue ($B)Q1 2026——$12.50 ± $0.30 (GAAP/Non-GAAP) New guide
Gross Margin %Q1 2026——50.5% ±1.0% GAAP; 51.5% ±1.0% Non-GAAP New guide
OpEx ($B)Q1 2026——$1.49 ± $0.02 GAAP; $1.34 ± $0.02 Non-GAAP New guide
Diluted EPS ($)Q1 2026——$3.56 ± $0.15 GAAP; $3.75 ± $0.15 Non-GAAP New guide
Dividend ($/share)Q4 2025——$0.115 declared Sept 23, payable Oct 21 Maintained

Earnings Call Themes & Trends

TopicQ2 2025 (Previous Mentions)Q3 2025Q4 2025 (Current)Trend
HBM scale/positionHBM revenue >$1B in Q2; 1-gamma launch; on track for record revenue HBM run-rate >$6B; steady pricing; mix dilution from consumer masked blended ASP; customers finalizing 2026 plans Expect higher HBM share in 2026; HBM4 sampled; “highest performance… 30% lower power vs competitor” (HBM3E); ROI through-cycle Strengthening share and technology lead
DRAM supply/demandRecord data center DRAM; guidance for Q3 strength DRAM tight; favorable mix to DRAM/data center; margin up vs guidance DRAM “tight already today and getting even tighter”; DDR4 scarcity elevates margins; pricing improving Tightening and price/margin tailwind
NAND dynamicsGrowing in data center SSD; record product portfolio Underutilization absorbed into inventory; careful capacity, premium SSD focus; inventories improving, less healthy than DRAM Bits down Q4 mix noise; hyperscalers need more SSD as HDD short; industry improving; exiting managed NAND Gradual improvement; portfolio refocus
LPDDR in data center—Sole-source position expanding; penetration to grow due to power constraints Strategy to lead with LPDRAM alongside HBM/GDDR7 as inference grows to ~80% over time Growing adoption
CAPEX and Idaho fab—Deleveraging; liquidity strength Net capex from $13.8B FY25 to ~$18B FY26, “vast majority for DRAM”; Idaho production 2H 2027; FX/startup costs to rise modestly Elevated DRAM capex to meet demand
Tariffs/macro—Pull-ins modest; DRAM bit growth outlook raised independent of tariffs Section 232 tariffs considered in LT agreements; thoughtful on pricing, US manufacturing Manageable; strategic LT contracts

Management Commentary

  • CEO: “Micron closed out a record-breaking fiscal year with exceptional Q4 performance… As the only U.S.-based memory manufacturer, Micron is uniquely positioned to capitalize on the AI opportunity ahead.”
  • CFO: “Market conditions are very good, very tight on DRAM… Operating margin’s the highest since November 2018… we expect second quarter gross margin to be up relative to first.”
  • CBO (Sumit Sadana): “We believe that our HBM4 has the highest performance amongst any competing product… tremendous customer preference… confidence we will sell out supply for calendar 2026.”
  • Operations (Manish Bhatia): “We achieved both mature yield [on 1-gamma]… first revenue shipments… one-gamma will be the primary area providing bit growth for fiscal 2026.”

Q&A Highlights

  • NAND outlook: Hyperscalers increasing SSD adoption due to HDD shortages; industry tightens through CY26; Micron maintaining structurally lower NAND wafer outs and slowed transitions while working down inventory .
  • CAPEX: Net capex rising to ~$18B in FY26, focused on DRAM construction/equipment to support HBM and high-value markets .
  • HBM economics: Long-lead, locked volumes/pricing drive through-cycle ROI; HBM4 cost and ASP meaningfully higher than HBM3E, margins managed via product ROI rather than quarter-to-quarter pricing .
  • DDR4 and margin drivers: DDR4 now a low single-digit % of revenue but constrained supply supports pricing; overall margin expansion driven primarily by mix to DRAM/data center and pricing execution .
  • Interest line: Interest flipping to income in Q1 FY26 given higher cash, lower debt, and greater capitalized interest .

Estimates Context

MetricQ2 2025Q3 2025Q4 2025
Revenue Consensus Mean ($B)*7.898.8311.16
Actual Revenue ($B)8.05 9.30 11.32
EPS Consensus Mean ($)*1.4251.5952.860
Actual EPS (Non-GAAP, $)1.56 1.91 3.03
  • Q4 beat: Revenue +$0.16B; EPS +$0.17 vs consensus. Q3 and Q2 also beat on both revenue and EPS [Values retrieved from S&P Global]*.

Key Takeaways for Investors

  • Pricing and mix tailwinds: Tight DRAM supply, data center mix, and disciplined pricing drove margins above 45% in Q4; management expects margins to expand further in November quarter .
  • HBM leadership as a durable driver: HBM3E maturity and HBM4 sampling position Micron for share gains and premium ASPs through CY26, supporting through-cycle ROI and visibility .
  • Sequential growth continues: Q1 FY26 guide implies ~$1.2B sequential revenue increase and non-GAAP GM ~51.5%; EPS guide $3.75 signals operating leverage persistence .
  • NAND strategy refocused: Exit of managed NAND and prioritization of high-value data center SSDs improve portfolio ROI as hyperscalers push capacities to 122TB/245TB+ .
  • Execution on 1-gamma: Rapid yield and revenue shipments indicate strong DRAM cost/bit trajectory underpinning FY26 supply while capex scales to meet demand .
  • Capital structure and cash flow: Two consecutive years of positive NAND FCF and rising OCF (Q4 $5.73B) provide flexibility for capex, dividends, and opportunistic buybacks .
  • Watch policy risks and LT agreements: Tariff frameworks and US manufacturing could influence pricing structures; management is pursuing thoughtful long-term customer agreements .

Footnote: *Values retrieved from S&P Global.