tkal · Micron Q4 FY26: The Customers Put Up More Than the Capex

Micron Q4 FY26: The Customers Put Up More Than the Capex

Micron's customers put $12.3B of cash behind their take-or-pay agreements in the fourth quarter, more than the $10.77B Micron spent on net capex. That is the strongest evidence yet that the contract floor is real, and it is a loan: the deposits go back to the customers in the back half of each term, the same years the new cleanrooms start output. Watch the deposit line on the Q1 FY27 balance sheet: above $18.0B and the customers are still funding the build; no higher than $12,895M and this quarter was the whole of it.

Published September 30, 2026 · 14 weeks ended September 3, 2026, reported after the close September 30, 2026 · MU · NASDAQ · Not advice

Revenue

$54.23B

+379% YoY · 14-week quarter

Non-GAAP diluted EPS

$33.42

vs ~$31 ± $1 guide · +33% QoQ

Customer deposits received

$12.3B

vs $10.77B net capex

Q1 FY27 revenue guide

$61.5B

± $1.5B · ~86.25% gross margin

Quarter ended September 3, 2026 · reported after the close September 30, 2026 · figures from the Q4 FY26 8-K Exhibit 99.1, the FY26 Forms 10-Q and the call's prepared remarks unless marked

A beat inside a longer quarter

Micron reported revenue of $54,229M after the close on September 30, 2026, up 379% on a year ago and $3,229M above the top of a ~$50B ± $1B guide. Non-GAAP EPS was $33.42, $1.42 above the guide's $32 top, and $1.92 above a vendor consensus of $31.50 (unverified). The first-quarter guide is $61.5B ± $1.5B and $38.15 of EPS, $2.79 above consensus (unverified). The stock closed the regular session at $1,068.95 and traded $1,067.95 that evening (unverified, market data). Nothing moved.

One reason the tape shrugged is on the calendar, not the income statement. The quarter ran from May 28 to September 3, 98 days, a 14-week quarter against 13 in each of the three before it. Read per week, revenue grew 74.9% in the second quarter, 73.7% in the third and 21.47% in the fourth. The headline 30.81% sequential gain carries a week the first quarter will not have, so the guide's 13.41% looks like a stall and is not: over an assumed 13 weeks (unverified), the $61.5B midpoint is $4,730.8M a week, 22.13% above the fourth quarter's rate. The house rule on single periods applies here: a one-quarter move is a phase until the series says otherwise, and this series says the deceleration already happened, in the quarter the market just cheered, and the guide holds the new pace rather than slipping from it.

Per week, revenue grew 74.9% and 73.7% in the second and third quarters, then 21.47% in the fourth. The first-quarter guide midpoint is 22.13% above the fourth quarter's weekly rate, so the step-down already happened. Revenue divided by weeks in the quarter: 13, 13, 13, 14 and, for the guide, 13 (assumed; Micron has not published the Q1 FY27 calendar). $13,643M, $23,860M, $41,456M, $54,229M and the $61.5B guide midpoint. The fourth quarter ran from May 28 to September 3, 2026, 98 days.

The numbers

Price did most of it again, at a slower rate. DRAM revenue was $39.8B, 73% of the total, on bit shipments up mid-single digits and prices up high-teens percent; in June it had been prices up in the low-60s. NAND was $14.1B, up 42% sequentially, bits up about 10%, prices up about 30%. Bit growth of that size in a quarter one week longer is a factory running flat out, which is what management says: "we do not have line of sight to when supply and demand will return to balance."

Of the $42,914M of revenue Micron added between Q4 FY25 and Q4 FY26, DRAM supplied about $30,816M, 71.8%, and NAND about $11,848M, 27.6%. NAND's share of revenue rose from 19.9% to 26% in a year, so the newer growth is coming disproportionately from NAND. DRAM by quarter: $6,400M, $6,123M, $7,071M, $8,984M, $10,812M, $18,768M, $31,328M and $39.8B; NAND: $2,241M, $1,855M, $2,155M, $2,252M, $2,743M, $4,997M, $9,943M and $14.1B. Q4 FY25 is the FY25 Form 10-K total less the nine-month figures. Q4 FY26 is the prepared remarks' rounded figures; the exact split arrives with the FY26 Form 10-K. Other revenue (primarily NOR) is not drawn. Q4 FY26 ran 14 weeks.

Non-GAAP gross margin reached 87.0%, up 210 basis points; GAAP was 86.76%, and 69.52% of revenue reached net income. Core Data Center grew to $18,002M at a 90% gross margin and became the largest unit, ahead of Cloud Memory at $16,283M and 83%; together the two data-center units were 63.2% of revenue. Data center SSD revenue was "nearly $10 billion." HBM "grew faster than total company revenue," and Micron has "completed agreements for the vast majority of our calendar 2027 HBM bit supply with significant price increases year over year, narrowing the gross margin gap with conventional DRAM." Operating expenses rose $1.1B, on incentive pay and a $300M community contribution; GAAP also carries a $500M patent license charge.

Of $54.23B of revenue, $47.05B survives cost of goods and $37.70B reaches net income, 69.5 cents on the dollar. The two data-center units are 63.2% of revenue. Y/Y computed from the release ($54,229M against $11,315M a year earlier). All other = $54,229M less the four business units ($54,223M). Net other income = $575M interest income less $88M other non-operating expense plus $46M equity in net income of equity method investees = $533M, netted against the $6,583M tax provision: $43,751M less $6,050M = $37,701M. The quarter ran 14 weeks, against 13 in the prior quarter.

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The headline numbers are above. The 7 sections below carry the mechanism, the peer read, the valuation work, and the dated tests that decide it.

The deposit is the story
When the money goes back
Grading June
The strongest case against me
What decides it
The trade (analysis, not advice)
Bottom line

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The deposit is the story

Mark Murphy, the chief financial officer, gave the line the whole quarter turns on: "customer cash deposits associated with SCAs are reported within financing activities and therefore do not affect our free cash flow. Customer cash deposits received during fiscal Q4 were $12.3 billion." Decode it. Customers that signed Micron's strategic customer agreements, take-or-pay contracts on volume with a price floor under most of them, wired Micron more cash in one quarter than Micron spent on fabs. On the balance sheet, noncurrent customer contract liabilities went from $568M in May to $12,895M, a rise of $12,327M, 114.4% of the quarter's $10,774M of net capex.

Operating cash flow of $43,973M less $10,774M of net capex left $33,199M of adjusted free cash flow. Customer deposits under the strategic customer agreements added $12,327M on top, more than the quarter's net capex, and Micron reports them in financing, not in free cash flow. Customer deposits here are the change in noncurrent customer contract liabilities on the balance sheet, $568M at May 28, 2026 to $12,895M at September 3, 2026. The prepared remarks give $12.3 billion received in the quarter and $12.7 billion on the balance sheet. Net capex is property, plant and equipment of $11,110M less $327M of government incentives and $9M of equipment sales.

The house has a model for a customer funding a supplier's build, the customer became the lender, and its reference case was Oracle, where the prepayment arrived inside operating cash flow and no leverage screen could see it. Micron's version is the visible one. The money sits in financing, adjusted free cash flow of $33,199M is clean of it, and management says outright what the money is: "SCA cash 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." That last clause is the mechanism. A deposit that is returned only if the customer takes its minimum volume is the enforcement behind a take-or-pay floor. The customer is not prepaying for memory. It is posting collateral against its own demand forecast.

That answers the house's standing question, who ultimately pays for the capex, more directly than any memory print before it. Commitments across the 26 agreements rose to "$32 billion, the vast majority of which are cash deposits." With $12.7B on the balance sheet, about $19.3B of committed money has not arrived yet, not all of it necessarily cash. Micron guided net capex of around $11.5B in the first quarter and about $25B for the first half, higher in the second, which puts fiscal 2027 above $50B, 82.7% above fiscal 2026. "A majority of the increase is for construction capex, most of which is to help accelerate clean room space availability in late calendar 2028 and beyond."

When the money goes back

Line the two calendars up. The Idaho ID1 fab starts wafer output in mid-calendar 2027, ID2 in late 2028, the Japan expansion in late 2028, the Singapore NAND fab in the second half of 2028 and New York in 2030. The agreements signed in June were mostly five-year terms over calendar 2026 to 2030, per the June call, and now some run into 2031. "Toward the latter half of each agreement's term" is roughly 2028 to 2030. The deposits go back as the capacity they helped pay for comes on. A commitment is an allocation claim before it is a cost: for the buyer, the deposit reserves wafers other buyers cannot have; for Micron, the refund falls due in the same window its own new supply lands in the market. That is fine at a floor price with margins that management says stay "meaningfully above any prior cycle peak margins." It matters only if the new supply arrives into a softer market, and even then the minimum-purchase condition makes the customer, not Micron, the party that forfeits.

Grading June

The June dive set four things to watch. Remaining performance obligations were guided to about $100B across 16 agreements; Murphy now puts them at "approximately $150 billion" across 26, on committed volumes at minimum prices. The 10-Q for the May quarter had recorded only about $5B, because it counted agreements in force at the quarter end and Micron was still signing others after it closed; the fiscal 2026 10-K is the first filed number on the new base. Deposits were expected at "roughly $10B" in the fourth quarter and came in at $12.3B. Price moderation arrived as flagged: DRAM prices rose high-teens percent against low-60s in June. And the margin call held: gross margin 87.0% against a ~86% guide, with the first quarter's 86.25% named "the floor for gross margins in fiscal 2027." June's read was right on all four; the part it underweighted was the cash.

The strongest case against me

Here is the other side at full strength. Micron does not need anyone's money. It ended the year with $73.5B of cash and investments, $68.3B net of debt, and produced $33,199M of adjusted free cash flow in one quarter, about three times the quarter's net capex. The deposits went straight into long-term marketable investments, which rose $25,913M. Calling them funding for the capex is a story about fungible cash: Micron would build the same fabs without a dollar of deposit, and the deposit's only job is to make the take-or-pay contract enforceable. On this reading there is no lender, only a security deposit, and the refund schedule is housekeeping.

I agree with most of that and still land the other way on what it means. The point is not that Micron needs the money; it is that the customer was willing to part with it. $12.3B in one quarter is the buyer's own balance sheet underwriting the demand behind the agreements, which is the thing memory has never had in any prior cycle. Strip the deposits and net cash is still $55.6B; there is no solvency question here. The question is whether that willingness keeps arriving at the rate capex is rising, because the $19.3B still to come is the difference between a one-quarter signing bonus and a financing model.

What decides it

One line, on one date: noncurrent customer contract liabilities on the balance sheet for the first quarter of fiscal 2027, reported around December 16, 2026 (unverified, tentative date). Above $18.0B, at least $5.1B more arrived, more than a quarter of the committed money still outstanding, in the quarter capex steps up to around $11.5B, and customers are paying into the build as it grows. No higher than $12,895M, no new money came in, the fourth quarter was a signing lump, and I'm wrong. Between the two is a partial result, and I'd call it that. The secondary checks are the RPO figure in the fiscal 2026 10-K against $150B, and first-quarter gross margin against the 86.25% floor.

The trade (analysis, not advice)

At $1,067.95 (unverified), MU trades at 14.14x fiscal 2026 non-GAAP EPS of $75.52 and 7.0x the first-quarter guide annualized, $152.60. It sits 12.2% below where it traded after the June print. The market is pricing the peak, not the floor, and a flat reaction to a guide that cleared consensus by 7.9% says the debate is no longer about the next quarter. It is about what the earnings are worth once supply catches up, and the deposits are the best evidence on that question. For a holder, the deposit line is the thing to track before the price line. For someone looking in from flat, the December balance sheet answers more than the December guide will. For the skeptic, the argument that remains is the late-2028 supply wave, and the deposits already put a date and a counterparty on it.

Bottom line

The beat was big and partly calendar, and per week the growth rate already stepped down to about 22%. What changed is the cash behind the contracts: $12.3B of customer money in one quarter, more than the capex, returned only if the customers take their minimums. Right if the deposit line is above $18.0B at the first-quarter balance sheet. Wrong if it is no higher than $12,895M.

Sources

Micron Technology, Inc.: "Micron Technology, Inc. Reports Record Fiscal Fourth-Quarter and Full-Year 2026 Results" (Form 8-K, Exhibit 99.1), filed September 30, 2026, primary source for every reported figure unless otherwise marked; unaudited. $ millions except per-share amounts. Quarter ended September 3, 2026 / May 28, 2026 / August 28, 2025: revenue 54,229 / 41,456 / 11,315; cost of goods sold 7,182 / 6,400 / 6,261; gross margin 47,047 / 35,056 / 5,054, 86.8% / 84.6% / 44.7% of revenue; non-GAAP gross margin 47,204 / 35,199 / 5,169, 87.0% / 84.9% / 45.7%; research and development 1,913 / 1,316 / 1,047; selling, general, and administrative 859 / 407 / 314; other operating (income) expense, net 524 / 15 / 39; operating income 43,751 / 33,318 / 3,654, 80.7% / 80.4% / 32.3%; non-GAAP operating expenses 2,568 / 1,518 / 1,214; non-GAAP operating income 44,636 / 33,681 / 3,955, 82.3% / 81.2% / 35.0%; patent license charges 500; interest income 575 / 215 / 146; other non-operating income (expense), net (88) / (321) / (45); income tax provision (6,583) / (4,978) / (429); equity in net income of equity method investees 46 / 9; net income 37,701 / 28,243 / 3,201; non-GAAP net income 38,398 / 28,857 / 3,469; GAAP diluted EPS $32.87 / $24.67 / $2.83; non-GAAP diluted EPS $33.42 / $25.11 / $3.03. Business units, quarter ended September 3, 2026 / May 28, 2026 / August 28, 2025, revenue and gross margin: Cloud Memory 16,283 / 13,769 / 4,543, 83% / 83% / 59%; Core Data Center 18,002 / 11,524 / 1,577, 90% / 87% / 41%; Mobile and Client 13,114 / 11,521 / 3,760, 90% / 87% / 36%; Automotive and Embedded 6,824 / 4,634 / 1,434, 84% / 79% / 31%. Fiscal 2026 / 2025: revenue 133,188 / 37,378; non-GAAP gross margin 81.1% / 40.9%; net income 84,969 / 8,539; non-GAAP diluted EPS $75.52 / $8.29; net cash provided by operating activities 89,675 / 17,525; expenditures for property, plant, and equipment (30,712) / (15,857); proceeds from customer contract liability deposits 12,747; repayments of debt (10,043); repurchases of common stock under the repurchase program (650); investments in capital expenditures, net 27,367 / 13,804; adjusted free cash flow 62,308 / 3,721. Fourth quarter: net cash provided by operating activities 43,973 / 25,388 / 5,730; expenditures for property, plant, and equipment (11,110) / (7,826) / (5,658); proceeds from government incentives 327 / 733 / 711; proceeds from sales of property, plant, and equipment 9 / 9 / 20; investments in capital expenditures, net 10,774 / 7,084 / 4,927; adjusted free cash flow 33,199 / 18,304 / 803. Balance sheet, September 3, 2026 / May 28, 2026 / August 28, 2025: cash and equivalents 38,364 / 24,995 / 9,642; short-term investments 5,070 / 1,027 / 665; receivables 36,197 / 31,025 / 9,265; inventories 10,372 / 8,567 / 8,355; long-term marketable investments 30,019 / 4,106 / 1,629; property, plant, and equipment 63,310 / 56,426 / 46,590; total assets 195,888 / 134,112 / 82,798; accounts payable and accrued expenses 22,605 / 15,521 / 9,649; current debt 491 / 582 / 560; long-term debt 4,688 / 5,140 / 14,017; noncurrent customer contract liabilities 12,895 / 568 / 142; other noncurrent liabilities 11,659 / 7,172 / 2,002; total equity 138,378 / 100,724 / 54,165. Cash, marketable investments, and restricted cash of $73.48 billion at year end. Quarterly dividend $0.15 per share. First quarter fiscal 2027 outlook: revenue $61.5 billion ± $1.5 billion; gross margin approximately 85.95% GAAP and 86.25% non-GAAP; operating expenses approximately $2.31 billion GAAP and $2.06 billion non-GAAP; diluted EPS $37.84 ± $1.00 GAAP and $38.15 ± $1.00 non-GAAP, on approximately 1.15 billion diluted shares. Chairman and chief executive Sanjay Mehrotra: "our Strategic Customer Agreements provide added confidence in the durability of Micron's financial performance."
Micron Technology: Fiscal Q4 2026 earnings call prepared remarks (Sanjay Mehrotra, chief executive; Mark Murphy, chief financial officer), September 30, 2026. Source for: 26 strategic customer agreements (SCAs), "which we currently estimate to be over 35% of our revenue through 2030"; "Three-quarters of this estimated revenue has a defined pricing framework, a majority of which have pricing bands with floor and ceiling prices"; SCAs extending into 2031; "financial commitments from customers have increased to $32 billion, the vast majority of which are cash deposits"; remaining performance obligations "approximately $150 billion", "based on committed volumes and minimum pricing and is inherently conservative", "even at floor prices, we expect margins meaningfully above any prior cycle peak margins"; revenue up 31% sequentially and 379% year over year, the sixth consecutive quarterly record; DRAM revenue $39.8 billion, 73% of revenue, up 27% sequentially, bit shipments up mid-single digits, prices up high-teens percent; NAND revenue $14.1 billion, 26% of revenue, up 42% sequentially, bit shipments up approximately 10%, prices up approximately 30%; fiscal 2026 DRAM revenue above $100 billion; gross margin 87.0%, up 210 basis points; operating expenses $2.6 billion, up $1.1 billion, on higher incentive compensation and a $300 million community contribution; operating margin 82.3%; tax $6.8 billion at an effective rate of 15%; "customer cash deposits associated with SCAs are reported within financing activities and therefore do not affect our free cash flow. Customer cash deposits received during fiscal Q4 were $12.3 billion"; "Customer cash deposits on our balance sheet at the end of fiscal Q4 were $12.7 billion. SCA cash 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"; inventory $10.4 billion, 129 days, up nine days; cash and investments $73.5 billion; debt $5.2 billion; net cash $68.3 billion; debt reduced about $500 million; BBB+ with all three agencies; capital return to increase from December 9, 2026; data center SSD revenue "nearly $10 billion", over two-thirds of NAND revenue; HBM revenue "grew faster than total company revenue"; "We have completed agreements for the vast majority of our calendar 2027 HBM bit supply with significant price increases year over year, narrowing the gross margin gap with conventional DRAM"; industry DRAM bit shipments up mid-20s percent in calendar 2026 and low-20s percent in 2027 and 2028, NAND low-20s in 2026 and mid-20s in 2027 and 2028, "we do not have line of sight to when supply and demand will return to balance"; server units up high-teens percent in calendar 2026 and 2027; fiscal Q1 capex around $11.5 billion, first-half fiscal 2027 capex approximately $25 billion, "higher in the second half"; "A majority of the increase is for construction capex, most of which is to help accelerate clean room space availability in late calendar 2028 and beyond"; fiscal 2027 operating expenses up approximately $2.5 billion; "We anticipate fiscal Q1 to be the floor for gross margins in fiscal 2027"; "with a more moderate rate of price increases"; ID1 wafer output mid-calendar 2027, ID2 late calendar 2028, New York calendar 2030, Japan expansion late calendar 2028, Singapore HBM packaging early calendar 2027, Singapore NAND second half calendar 2028.
Micron Technology: Form 10-Q for the quarter ended May 28, 2026, filed June 25, 2026, and the Forms 10-Q for the quarters ended February 26, 2026 and November 27, 2025. Revenue by quarter: 13,643 (November 27, 2025), 23,860 (February 26, 2026), 41,456 (May 28, 2026), $ millions. DRAM 31,328 and NAND 9,943 in the May quarter. "As of May 28, 2026, the transaction price allocated to our remaining performance obligations was approximately $5 billion, of which $422 million has been recognized as contract liabilities. Contract liabilities primarily consisted of customer deposits associated with strategic customer agreements"; "Pricing for most agreements is either fixed, or is subject to minimum and maximum pricing." Purchase obligations for property, plant and equipment approximately $2.93 billion at May 28, 2026. Nine-month financing activities carried no customer deposit line. Revenue by technology, $ millions, DRAM / NAND: 6,400 / 2,241 (November 28, 2024), 6,123 / 1,855 (February 27, 2025), 7,071 / 2,155 (May 29, 2025), 10,812 / 2,743 (November 27, 2025), 18,768 / 4,997 (February 26, 2026), 31,328 / 9,943 (May 28, 2026); fiscal 2025 (Form 10-K) 28,578 / 8,503.
Micron Q3 FY26, as read in the tkal dive, published June 24, 2026, from the Q3 call: 16 SCAs; about $100B of RPO across 14 of them; about $22B of deposits and commitments, about $18B of it cash, "roughly $10B of it landing in FQ4"; fourth-quarter guide revenue ~$50B ± $1B, gross margin ~86%, EPS ~$31 ± $1; fiscal 2026 capex about $27B; the agreements mostly five-year terms over calendar 2026 to 2030; DRAM prices up in the low-60s percent range and NAND in the mid-80s in that quarter. MU was near $1,216 after hours that night (unverified).
Market data (unverified): MU closed $1,065.08 on September 29, 2026 and last traded $1,068.95 in the regular session on September 30; after the release it traded $1,067.95 at 7:42 p.m. ET (Public.com quote). Vendor consensus non-GAAP EPS $31.50 for the quarter and $35.36 for Q1 FY27; next report tentatively December 16, 2026 (Robinhood earnings feed).
Derived figures, stated as such. Weeks: the quarter ran from May 28 to September 3, 2026, 98 days or 14 weeks, against 13 weeks in each of the first three quarters; fiscal 2026 had 53 weeks. Revenue per week $1,049.5M, $1,835.4M, $3,188.9M, $3,873.5M, and $4,730.8M at the Q1 FY27 guide midpoint over an assumed 13 weeks; growth per week 74.9%, 73.7%, 21.47% and 22.13%; guide range $4,615.4M to $4,846.2M a week, 19.2% to 25.1%. Fourth-quarter revenue on a 13-week basis $50,356M. Headline growth 30.81% sequential; the guide midpoint is 13.41% above the fourth quarter. Revenue $3,229M above the $51B top of the prior guide; EPS $1.42 above the $32 top. Gross margin 86.76% GAAP; net margin 69.52%; the two data-center units 63.2% of revenue. Deposits: noncurrent customer contract liabilities rose $12,327M in the quarter, 114.4% of net capex and 37.1% of adjusted free cash flow; $32 billion of commitments less $12.7 billion on the balance sheet is $19.3 billion; deposits are 17.3% of the $73.5 billion of cash and investments; net cash less deposits $55.6 billion. Cash, short-term and long-term marketable investments $30,128M to $73,453M, up $43,325M; long-term marketable investments up $25,913M. Operating cash flow less net capex plus deposits $45,526M. Capex: fiscal 2026 net capex up 98.3%; the first-half guide implies about $13.5 billion in the second quarter, and a second half above the first puts fiscal 2027 above $50 billion, 82.7% above fiscal 2026. Revenue by technology in Q4: DRAM $39.8 billion and NAND $14.1 billion (prepared remarks), leaving $329M of other revenue. Q4 FY25 by technology, the FY25 Form 10-K less nine months: DRAM $8,984M, NAND $2,252M. Revenue added from Q4 FY25 to Q4 FY26 $42,914M, of which DRAM about $30,816M (71.8%) and NAND about $11,848M (27.6%); NAND 19.9% of revenue in Q4 FY25. Tax less net other income $6,050M, where net other income is $575M interest income less $88M other non-operating expense plus $46M equity income, $533M. Net capex is $11,110M of property, plant and equipment less $327M of government incentives and $9M of equipment sales. The four business units sum to $54,223M, $6M short of revenue. Dated-test thresholds: $18.0B to confirm, $12,895M (the September 3 balance) to refute; $18,000M less $12,895M is $5,105M, about $5.1B, 26.5% of the $19.3B still outstanding. Receivable days 65.4 at September 3 against 68.1 at May 28, on quarter revenue per day. Valuation at $1,067.95 (unverified): 14.14x fiscal 2026 non-GAAP EPS; 7.0x the $152.60 annualized Q1 guide; 12.2% below the Q3 after-hours price; EPS $1.92 (6.1%) above consensus; the Q1 guide $2.79 (7.9%) above Q1 consensus.