Micron Q1 Revenue Up 57%, FY2026 Capex $20B

On December 17 (U.S. local time), after the market closed, Micron Technology released its fiscal 2026 first-quarter earnings—and the results clearly exceeded expectations. Strong quarterly performance and an upbeat outlook for the next quarter pushed Micron shares up about 8% in after-hours trading. Before the release, the stock was already up 168% year to date, closing at USD 225.71.

For the first quarter, Micron reported adjusted revenue of USD 13.64 billion, up 57% year over year and well above the market consensus of USD 12.95 billion. Adjusted net profit reached USD 5.48 billion, compared with USD 3.47 billion a year earlier. Adjusted earnings per share (EPS) came in at USD 4.78, significantly beating expectations of USD 3.95.

From a profitability perspective, operating performance was equally strong. On a GAAP basis, operating income was USD 6.14 billion, representing a 45.0% operating margin. On a non-GAAP basis, operating income increased to USD 6.42 billion, or 47.0% of revenue, above analyst forecasts. Gross margin reached 56.0% under GAAP and 56.8% on a non-GAAP basis, reflecting continued pricing strength across memory products.

Cash generation also stood out. Operating cash flow totaled USD 8.41 billion, far exceeding expectations and sharply higher than both the prior quarter and the same period last year. Net capital expenditures for the quarter were USD 4.5 billion, while operating expenses increased modestly in line with Micron's expansion plans.

Micron Chairman, President, and CEO Sanjay Mehrotra said the company delivered record revenue and meaningful margin expansion across all business units in fiscal Q1 2026. He highlighted that rapid growth in AI data center capacity is driving strong demand for high-performance, high-density memory and storage solutions.

Looking at individual segments, cloud memory and storage remained Micron's largest revenue contributor, with year-over-year growth close to 100% and margins well above other segments. The company noted that revenue growth in cloud and data center markets was largely driven by higher pricing. To prioritize supply for these higher-demand, higher-margin applications, Micron is taking strategic supply protection measures, including exiting direct consumer sales.

In the cloud storage segment, first-quarter revenue reached USD 5.28 billion, up 16.3% quarter over quarter and 99.5% year over year. Gross margin climbed to 66%, with an operating margin of 55%. Data center revenue came in at USD 2.38 billion, showing strong sequential growth, while maintaining solid profitability. Mobile and client products delivered USD 4.26 billion in revenue, with sharp improvements in both gross and operating margins. Automotive and embedded solutions continued to scale, posting USD 1.72 billion in revenue and significant margin expansion compared with last year.

For the second fiscal quarter, Micron forecast revenue of approximately USD 18.7 billion, plus or minus USD 400 million—far above market expectations. Gross margin is projected at around 67% on a GAAP basis and 68% on a non-GAAP basis. Non-GAAP diluted EPS is expected to reach about USD 8.42, nearly double analyst forecasts.

To better support surging AI-related demand, Micron is accelerating strategic adjustments. Earlier in December, the company announced plans to exit its Crucial consumer business, with shipments continuing through sales channels until the end of the second fiscal quarter. After that, Micron will fully focus on enterprise and commercial markets to preserve supply for AI and data center applications.

At the same time, Micron significantly raised its capital spending plans. After investing USD 13.8 billion in new fabs and equipment in fiscal 2025, the company now expects capital expenditures in fiscal 2026 to rise to around USD 20 billion, up from a previous estimate of USD 18 billion, underscoring its confidence in long-term demand for advanced memory technologies.