Micron Reported $54.2 Billion of Quarterly Revenue at an 86.8% Gross Margin and Guided to $61.5 Billion for the November Quarter; Customer Deposits on Its Balance Sheet Jumped to $12.9 Billion

by Ryo Tanaka · October 2, 2026

Technology Reporter, US Market Current

Micron Technology reported revenue of $54.23 billion for its fiscal fourth quarter ended Sept. 3, up from $41.46 billion in the prior quarter and $11.32 billion in the same quarter a year earlier, with GAAP net income of $37.70 billion, or $32.87 per diluted share, according to the results release the company furnished to the SEC on Sept. 30 after the market close. GAAP gross margin was 86.8% of revenue. For the November quarter, the first of fiscal 2027, Micron guided to revenue of $61.5 billion plus or minus $1.5 billion and GAAP diluted EPS of $37.84 plus or minus $1.00.

Fiscal 2026 revenue was $133.19 billion against $37.38 billion in fiscal 2025, GAAP net income was $84.97 billion against $8.54 billion, and GAAP diluted EPS was $74.33 against $7.59. Operating cash flow for the year was $89.68 billion, up from $17.53 billion. The company's headline calls both the quarter and the year records, and the subhead reads: "AI-driven demand and strong operational execution position Micron for a record fiscal 2027."

The margin structure is unusual for a memory manufacturer. Cost of goods sold in the quarter was $7.18 billion on $54.23 billion of revenue, versus $6.26 billion of cost on $11.32 billion of revenue a year earlier, meaning the cost base rose about 15% while revenue rose almost fivefold on our arithmetic. Operating income was $43.75 billion, or 80.7% of revenue. Operating expenses more than doubled from the year-earlier quarter to $3.30 billion, including a $500 million patent license charge excluded from the non-GAAP figures. The income tax provision was $6.58 billion.

All four business units reported gross margins of 83% or higher. The Core Data Center Business Unit generated $18.00 billion of revenue, up from $11.52 billion in the prior quarter and $1.58 billion a year earlier, at a 90% gross margin and an 85% operating margin. The Cloud Memory Business Unit reported $16.28 billion of revenue at an 83% gross margin, with an operating margin of 76%, down from 78% in the prior quarter. Mobile and Client was $13.11 billion at a 90% gross margin; Automotive and Embedded was $6.82 billion at 84%. A year earlier, those four units' gross margins were 41%, 59%, 36% and 31% respectively.

Chairman and Chief Executive Sanjay Mehrotra, in the release, said: "Micron delivered record fiscal 2026 results, and we expect an even stronger fiscal 2027." He added that the company is "increasing our investments in technology, products and manufacturing" and that "our Strategic Customer Agreements provide added confidence in the durability of Micron's financial performance." The release does not define the Strategic Customer Agreements or give their number or value.

The balance sheet shows where the agreements land. Noncurrent customer contract liabilities stood at $12.90 billion at Sept. 3, up from $568 million at the end of May and $142 million a year earlier. The cash flow statement shows $12.75 billion of "proceeds from customer contract liability deposits" in financing activities for the year, a line that was zero in fiscal 2025. The company's prepared remarks for the Sept. 30 call, posted on its investor site, identify these as customer cash deposits tied to the agreements: $12.3 billion arrived in the fourth quarter, $12.7 billion was on the balance sheet at quarter-end, and the deposits "are unrestricted and will be returned to customers over time, toward the latter half of each agreement's term, assuming minimum purchase requirements are met." The customers are not named.

The prepared remarks put numbers on the agreements that the release does not. Micron said it has signed 26 of them, "which we currently estimate to be over 35% of our revenue through 2030," and described them as "multi-year take-or-pay agreements." Three-quarters of that estimated revenue carries a defined pricing framework, most of it with floor and ceiling bands, while the remaining quarter is priced "periodically based on market prices." Customer financial commitments under the agreements have risen to $32 billion, "the vast majority of which are cash deposits," and remaining performance obligations stand at approximately $150 billion, which the company said covers only agreements with a determined pricing framework and is "based on committed volumes and minimum pricing." Some agreements now run into 2031. The remarks do not say how many were signed in the quarter.

Capital spending is the other number investors have watched. Investments in capital expenditures, net, a non-GAAP measure that nets government incentive proceeds against property, plant and equipment outlays, were $10.77 billion in the quarter and $27.37 billion for the year, up from $13.80 billion in fiscal 2025. Gross expenditures for property, plant and equipment were $30.71 billion for the year, offset by $3.32 billion of government incentive proceeds. Adjusted free cash flow was $33.20 billion in the quarter and $62.31 billion for the year. The release itself gives no fiscal 2027 capital expenditure figure; the prepared remarks project around $11.5 billion in the first quarter and approximately $25 billion for the first half, net of anticipated government incentives, with second-half spending higher and "a meaningfully higher growth rate in construction capex as compared to equipment capex." The company said the plan is an increase "versus prior plans," mostly for construction to add cleanroom space from late calendar 2028.

The cash built up accordingly. Micron ended the year with $73.48 billion of cash, marketable investments and restricted cash, made up of $38.36 billion of cash and equivalents, $5.07 billion of short-term investments, $30.02 billion of long-term marketable investments and a small amount of restricted cash, the last of which was $1.63 billion a year earlier. Long-term debt fell to $4.69 billion from $14.02 billion after $10.04 billion of repayments and no new issuance, and shareholders' equity rose to $138.38 billion from $54.17 billion.

Shareholder returns remain small relative to those flows: $650 million of buybacks under the program in fiscal 2026 and $610 million of dividends. The board declared a quarterly dividend of $0.15 per share on Sept. 30, payable Oct. 29 to holders of record Oct. 14. Receivables rose to $36.20 billion from $9.27 billion a year earlier, and inventories to $10.37 billion from $8.36 billion.

For context, Boise, Idaho-based Micron makes DRAM, NAND and NOR memory and storage products. Its fiscal 2025, which ended Aug. 28, 2025, produced $37.38 billion of revenue at a 39.8% GAAP gross margin and $9.77 billion of operating income, according to the comparative columns in Wednesday's release. The fiscal 2026 fourth quarter alone generated more revenue and, on our arithmetic, roughly four and a half times the operating income ($43.75 billion against $9.77 billion) of that entire prior year.

The first-quarter outlook implies continued sequential growth: revenue of $61.5 billion at the midpoint would be about 13% above the fourth quarter's $54.23 billion on our arithmetic. The company guided GAAP gross margin to approximately 85.95% and non-GAAP gross margin to approximately 86.25%, GAAP operating expenses to approximately $2.31 billion, and non-GAAP diluted EPS to $38.15 plus or minus $1.00.

Micron shares closed at $1,065.11 on Sept. 30, before the release, and at $1,097.39 on Oct. 1, according to Yahoo Finance historical data, on volume of about 45.6 million shares against 31.1 million the day before. The Associated Press, in its Oct. 1 market report, wrote that "Micron's stock rose 3 per cent to bring its stellar gain for the year so far to 284.5 per cent" and that "optimism for the industry rose after Micron Technology delivered a stronger profit report for the latest quarter than analysts expected."

What is not yet known is how durable the margin is. The release lists product milestones, including 512GB DDR5 RDIMM sampling and 1-gamma 8,800 MT/s server module qualifications, but does not quantify bit shipments or pricing. The prepared remarks say the deposits are returned to customers only if minimum purchase requirements are met, but neither document says how the $150 billion of remaining performance obligations is spread across years or customers. The 10-K, which the company had not yet filed, is the next document that should answer those questions.