Micron Technology’s Earnings Call Highlights Robust Growth

Micron Technology ((MU)) has held its Q4 earnings call. Read on for the main highlights of the call.

Micron Technology’s recent earnings call painted a picture of robust growth and strategic advancements, despite some hurdles. The sentiment was largely positive, driven by significant revenue growth, record-breaking data center performance, and strides in AI and technology. While challenges like NAND revenue declines and increased operating expenses were noted, the company’s strategic investments and market positioning suggest a promising outlook.

Record Revenue and Profitability

Micron Technology reported a record revenue of $37.4 billion for fiscal 2025, marking a nearly 50% increase year over year. This growth was accompanied by a gross margin expansion of 17 percentage points, reaching 41%. These figures underscore the company’s strong financial performance and its ability to capitalize on market opportunities.

Data Center Business Surge

The data center SSD business was a standout performer, achieving record revenue and market share. It contributed to 56% of Micron’s total revenue, with a gross margin of 52%. This surge highlights the growing demand for data center solutions and Micron’s leadership in this sector.

AI-Driven Productivity Gains

Micron reported significant productivity gains driven by AI, with a 30 to 40% uplift in select GenAI use cases. Additionally, there was a fivefold increase in wafer images analyzed, which enhanced yield performance. These advancements demonstrate Micron’s commitment to leveraging AI for operational efficiency.

Advanced Technology Leadership

Micron’s technological prowess was evident as its one gamma DRAM node achieved mature yields 50% faster than the previous generation. The company also recorded its first revenue from a major hyperscale customer, reinforcing its leadership in advanced technology.

Strong Financial Performance

Fiscal Q4 revenue reached $11.3 billion, a 46% increase year over year, with a consolidated gross margin of 45.7%. This performance was driven by improved DRAM pricing and cost reductions, showcasing Micron’s effective financial management.

NAND Revenue Challenges

Despite a 5% sequential increase, NAND revenue was down 5% year over year, with bit shipments declining in the mid-single-digit percentage range. This highlights the challenges Micron faces in the NAND segment, despite overall strong performance.

Potential Supply Constraints

Micron acknowledged potential supply constraints, particularly in managing DRAM and HBM supply. The company emphasized the importance of maintaining high ROI and disciplined investment to navigate these challenges.

Increased Operating Expenses

Operating expenses rose to $1.2 billion in fiscal Q4, an $81 million increase quarter over quarter, primarily due to higher R&D spending. This increase reflects Micron’s commitment to innovation and long-term growth.

Forward-Looking Guidance

Micron’s guidance for fiscal Q1 2026 is optimistic, with expectations for new records in revenue and EPS. Revenue is anticipated to reach around $12.5 billion, with a gross margin forecasted at approximately 51.5%. The company continues to emphasize its leadership in advanced technologies and strategic investments in AI and high-value data center products, positioning it for continued success.

In conclusion, Micron Technology’s earnings call highlighted a strong performance with record revenues and strategic advancements, particularly in the data center and AI sectors. Despite some challenges, the overall sentiment remains positive, with forward-looking guidance suggesting continued growth and innovation. Micron’s strategic positioning and investment in advanced technologies are expected to drive its success in the coming quarters.