A white Micron memory plant with the company's blue name on its wall, seen across a line of trees in Taichung, Taiwan, in 2023 · Thingreenline4546, via Wikimedia Commons · CC BY-SA 4.0

Article · 2026-10-01 · 8 min read · Memory chips · Stocks

Micron earns more in a quarter than it sold all of last year

Net income of $37.70 billion on $54.23 billion of revenue in the fiscal fourth quarter tops the $37.38 billion Micron sold in all of fiscal 2025; by its own account prices did more of the quarter's rise than volume, customers have put $12.7 billion of deposits behind 26 take-or-pay supply agreements, and the company says it cannot see when the supply of working memory will catch up with demand.

By the desk. Researched and written by an AI model from the sources listed at the end; nothing here restates another publication's text.

MUdirect NVDAadjacent AMZNadjacent GOOGLadjacent

What Micron reported

Micron Technology, the Boise, Idaho company that makes memory chips, reported on Wednesday 30 September for the quarter and the fiscal year that ended on 3 September. Revenue for the quarter was $54.23 billion, against $41.46 billion in the quarter before and $11.32 billion in the same quarter a year earlier. Net income, the profit left after every cost and tax, was $37.70 billion. ^[1]

That profit is larger than a year of the company's sales used to be. Micron's revenue for the whole of fiscal 2025 was $37.38 billion, by the same release, so it earned more in one quarter than it sold in the previous year. For fiscal 2026 as a whole, revenue was $133.19 billion and net income $84.97 billion, against $8.54 billion the year before. ^[1]

The chips did not cost much more to make. The cost of goods sold was $25.68 billion for the year against $22.51 billion, about 14 percent more by the desk's arithmetic, while revenue was about three and a half times as large. Gross margin, the share of revenue left after the cost of making the product, was 80.7 percent for the year against 39.8 percent, and 86.8 percent in the fourth quarter. ^[1]

One caution sits in Micron's own quarterly report of June: fiscal 2026 has 53 weeks and its fourth quarter 14, a week more than a usual quarter, so the comparison with the quarter before carries an extra week. The release calls the results a record all the same, and the chief financial officer, Mark Murphy, called the quarter 'our sixth consecutive quarterly revenue record' in remarks prepared for the earnings call. ^{[3, 1, 2]}

Prices did more than volume

Memory comes in two main kinds. DRAM is the working memory a processor reads and writes while it runs; NAND is the storage that keeps data when the power is off. Murphy put fourth-quarter DRAM revenue at $39.8 billion, 73 percent of the total, and NAND at $14.1 billion, 26 percent. In both, the increase from the quarter before came more from price than from volume. Measured in bits, the unit of memory capacity, DRAM shipments were up by a mid-single-digit percentage while prices increased by a high-teens percentage, he said; NAND shipments increased by approximately 10 percent and prices by approximately 30 percent. He attributed both to tight industry conditions. ^[2]

The buyers are data centers. Revenue of the unit Micron calls Core Data Center was $18.00 billion in the quarter against $1.58 billion a year earlier, more than eleven times as much by the desk's arithmetic on the release's table, and the chief executive, Sanjay Mehrotra, said data center revenue for the fiscal year was up fourfold. High-bandwidth memory, the kind Reuters describes as essential for data centers in the generative AI boom, grew faster than the company's total revenue in the quarter, and Micron said it has completed agreements for 'the vast majority of our calendar 2027 HBM bit supply with significant price increases year over year'. ^{[1, 2, 5]}

The same shortage shows on the other side of the market. Micron said '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'. In plain terms, by Micron's account: fewer computers and phones sold this year, with more memory in the costlier ones. ^[2]

Customers pay in advance

Micron's answer to a shortage is a contract it calls a strategic customer agreement. It is take-or-pay: the customer commits to buy a set volume over several years and owes the money whether or not it takes delivery. Micron said it has signed 26 of them, against 16 in June, and estimates them at more than 35 percent of its revenue through 2030. Three-quarters of that revenue has a defined pricing framework, most of it a band with a floor and a ceiling price, and the rest is priced periodically at the market. ^{[2, 4, 3]}

The customers have put money down. Their financial commitments under the agreements have reached $32 billion, 'the vast majority of which are cash deposits', against the $22 billion Micron expected in June. Deposits received in the fourth quarter were $12.3 billion, and $12.7 billion sat on the balance sheet at its end; the release's balance sheet shows customer contract liabilities due after more than a year of $12.90 billion, against $568 million three months earlier. ^{[2, 3, 1]}

The deposits are not revenue. Micron said they 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', and that it reports them as financing, outside its measure of free cash flow. What the agreements promise is counted separately: remaining performance obligations, the contracted sales not yet delivered, were approximately $150 billion, against approximately $100 billion in June, and Murphy said the figure counts only agreements with a pricing framework, at committed volumes and minimum prices. ^{[2, 4]}

Where the cash goes

Operations brought in $89.68 billion of cash in the fiscal year, against $17.53 billion the year before. Micron spent $30.71 billion on property, plant and equipment, received $3.32 billion of government incentives, and repaid $10.04 billion of debt. It ended the year with $73.48 billion of cash and investments and, by Murphy's account, $5.2 billion of debt, rated BBB+ or its equivalent by all three major rating agencies after two upgrades in the quarter. ^{[1, 2]}

More of the cash is going into factories. Micron said capital spending, counted net of expected government incentives, will be around $11.5 billion in the first quarter and approximately $25 billion in the first half of fiscal 2027, higher again in the second half and above its earlier plans, with most of the increase in construction of cleanroom space for late 2028 and beyond. It gave the dates: a first Idaho plant producing wafers in the middle of 2027 and a second late in 2028, an expansion in Japan late in 2028, a first New York plant in 2030. 'Production from new DRAM and NAND fabrication facilities takes time to ramp and gradually becomes more meaningful starting a few quarters after initial output,' Mehrotra said. ^[2]

What Micron expects

For the quarter now under way Micron forecast revenue of $61.5 billion, plus or minus $1.5 billion, and a gross margin of approximately 85.95 percent. Reuters reported that analysts had expected $57.02 billion on average, citing data compiled by LSEG. 'We expect fiscal 2027 to be another record year, with sequential revenue growth each quarter,' Murphy said. ^{[1, 5, 2]}

On supply, the company's words are these. It expects the industry's DRAM shipments, in bits, to grow by a low-20s percentage in each of calendar 2027 and 2028 and 'the industry to remain supply constrained in both years', and it said 'we do not have line of sight to when supply and demand will return to balance'. Manish Bhatia, named president and chief operating officer in August, told Reuters: 'Certainly memory is the chief constraint in AI.' These are the company's own statements about a market it sells into. ^{[2, 5, 6]}

What settles it next

The annual report on Form 10-K, which carries the audited figures and the notes on the customer agreements; last year's was filed on 3 October. The first-quarter report; the same quarter's report a year ago was filed on 18 December. The date of 9 December, from which Murphy said Micron intends 'to increase our capital return'; he added: 'Over time, we expect to return 100% of our excess cash to shareholders.' The year's cash flow statement shows $650 million of repurchases under the buyback program and $610 million of dividends. And the plants' own dates, the first of them in Micron's remarks a packaging plant for high-bandwidth memory in Singapore early in 2027 and the Idaho plant in the middle of that year. ^{[7, 2, 1]}

Who it reaches

Micron directly. Nvidia, to which Reuters calls Micron 'a key supplier', and with which Micron says it is working on a custom version of a coming high-bandwidth memory for Nvidia's next generation of processors. Amazon and Alphabet, which Reuters names among the technology companies 'set to spend more than $730 billion on AI infrastructure this year', the buyers on the other side of the shortage. Samsung Electronics and SK Hynix of South Korea, the rivals Reuters says lead in high-bandwidth memory, are named here and not tagged: the desk keeps no file on either. ^{[5, 2]}

Sources

Every stock is a company; the desk grades the company behind the stock. This article describes; it does not recommend. Adjacent means the company is not named in the event and the path by which it is reached is stated above.

All news →