Key Takeaways from Micron's Financial Report: Long-term Contracts Extend to 2030, Guaranteeing at Least $100 Billion in Revenue

Odaily reports: Micron released its financial report this morning, with the key information summarized as follows:

1. Performance (reported quarter)

Quarterly revenue was $41.46 billion (some sources list as $41.5 billion), higher than market expectations of around $35.8 billion.

Adjusted EPS was $25.11, above market expectations of around $20.7~$20.8.

Gross margin was 84.9%, higher than market expectations of 81.9%.

2. Guidance for next quarter (Q4)

Revenue guidance is $49~$51 billion, with a midpoint of $50 billion, higher than market expectations of $43.24 billion.

Adjusted EPS guidance is $30~$32, with a midpoint of $31, higher than market expectations of $25.31.

3. Long-term agreements (LTA/SCA) and customer commitments

16 long-term strategic customer agreements have been signed, mostly covering 2026 through the end of 2030. The agreements include take-or-pay clauses. Management expects related agreements to ensure about $100 billion in minimum revenue. They will receive around $22 billion in cash deposits and financial commitments. The signed agreements cover about 20% of DRAM output and about one-third of NAND output for the corresponding period. Management expects that about half or more of future revenue will be under long-term agreements.

4. Supply & demand and industry outlook

The company expects a tight supply and demand situation for DRAM and NAND to persist beyond 2027. DRAM industry shipments in 2026 are expected to increase by 20%~25%, an upward revision from previous forecasts. NAND industry shipments in 2026 are expected to grow by about 20%, in line with earlier guidance.

Micron’s DRAM supply growth is expected to be roughly in line with the industry. Micron’s NAND supply growth is expected to be slightly below the industry.

5. Capital expenditure and returns

Market feedback indicates company capital expenditures are in line with expectations. There are no apparent plans for aggressive capacity expansion. The company stated that capital returns will increase significantly in Q4. The $22 billion in customer prepayments is roughly equivalent to one-third of capital expenditures over the next two years.