Strong demand for AI, Micron's revenue surged 46% last quarter, and this quarter's guidance exceeds expectations, setting a new record | Earnings Report Insights

The storage chip giant Micron Technology not only delivered impressive results for the last fiscal quarter but also provided a stronger-than-expected guidance for the current fiscal quarter, signaling robust demand for artificial intelligence (AI).

Micron's performance for the fourth fiscal quarter ending last month accelerated growth, surpassing the already raised company guidance. Key products for AI infrastructure construction—High Bandwidth Memory (HBM)—continued to grow strongly, with revenue hitting a record high, driving the entire data center business to a record high for the fiscal year. Micron also expects that revenue for the current fiscal quarter will break the record set in the previous quarter, with growth significantly exceeding analysts' expectations.

As of now, Micron has achieved profitability for seven consecutive quarters. Typically, the DRAM (memory) cycle lasts six to eight quarters. This earnings report brings good news that the AI boom is likely to extend the cycle. Commentators believe that the guidance indicates signs of AI demand boosting Micron's sales, proving that Micron has become a major beneficiary of spending growth in the AI field, with its HBM being crucial for chips and systems that develop AI models, allowing the company to achieve substantial profits.

After the earnings report was released, Micron's stock price rose over 1% on Tuesday, and at one point in after-hours trading, it surged over 4%, before narrowing the gain to within 1%.

On September 23, Tuesday, after U.S. stock market hours, Micron Technology announced its financial data for the fourth fiscal quarter of 2025 (hereinafter referred to as Q4) ending August 28, 2025, and provided guidance for the first fiscal quarter of 2026 (Q1).

1) Key Financial Data:

Revenue: Q4 revenue was approximately $11.32 billion, a year-on-year increase of 46%, with analysts expecting $11.15 billion, and company guidance of $11 billion to $11.3 billion, compared to a year-on-year growth of 36.6% in the previous fiscal quarter.

EPS: The adjusted diluted earnings per share (EPS) for Q4 under non-GAAP was $3.03, a year-on-year increase of 156.8%, with analysts expecting $2.86, and company guidance of $2.78 to $2.92, compared to a year-on-year growth of 208% in the previous fiscal quarter.

Operating Profit: The adjusted operating profit for Q4 was $3.955 billion, a year-on-year increase of 126.6%, with analysts expecting $3.723 billion, compared to a year-on-year growth of 164.6% in the previous fiscal quarter.

Gross Margin: The adjusted gross margin for Q4 was 45.7%, an increase of 9.2 percentage points year-on-year, with analysts expecting 44.1%, and company guidance of 44% to 45%, compared to 39% in the previous fiscal quarter.

2) Segment Business Data:

DRAM: Q4 DRAM (memory) revenue was $9 billion, a quarter-on-quarter increase of 27%, accounting for approximately 79% of total revenue, compared to a quarter-on-quarter increase of 15% and accounting for 76% of total revenue in the previous fiscal quarter.

NAND: Q4 NAND (flash memory) revenue was $2.3 billion, a quarter-on-quarter increase of 5%, accounting for approximately 20% of total revenue, compared to a quarter-on-quarter increase of 16% and accounting for 23% of total revenue in the previous fiscal quarter

3) Performance Guidance:

Revenue: The first quarter revenue is expected to be $12.5 billion, with a fluctuation of $300 million, meaning the guidance range is $12.2 billion to $12.8 billion, while analysts expect $11.9 billion.

EPS: The adjusted diluted EPS for the first quarter is $3.75, with a fluctuation of $0.15, meaning the guidance range is $3.60 to $3.90, while analysts expect $3.05.

Gross Margin: The adjusted gross margin for the first quarter is 51.5%, with a fluctuation of 1 percentage point, meaning the guidance range is 50.5% to 52.5%.

Fourth Quarter Revenue Exceeds Expectations with 46% Growth, EPS Surpasses Significantly Revised Guidance, HBM Revenue Hits Record High

A month ago, Micron raised its fourth quarter performance guidance due to improvements in DRAM pricing, with the low end of the revenue guidance range raised by 6.7% and the high end raised by 2.7%. The EPS guidance range was significantly raised by at least about 10%, and the gross margin guidance range was raised by at least 2 percentage points.

The financial report released this Tuesday showed that Micron's fourth quarter revenue accelerated growth compared to the previous quarter, with a year-on-year growth rate increasing from less than 37% in the previous quarter to 46%. Revenue approached $11.32 billion, setting a new record for the highest quarterly revenue, and exceeded the company's entire guidance range, while analyst expectations were close to the low end of the guidance range.

Micron's full-year revenue grew by 49% year-on-year, reaching a record $37.4 billion.

Micron's fourth quarter EPS maintained a triple-digit year-on-year growth rate, more than doubling to $3.03, which was nearly 6% higher than analysts' expectations. Both the fourth quarter EPS and gross margin were above the company's entire revised guidance range.

The financial report indicated that fourth quarter HBM revenue hit a quarterly record high, including HBM provided for data center customers. Micron's cloud storage business (CMBU), which focuses on serving hyperscale cloud computing customers, generated $4.543 billion in revenue, a year-on-year increase of 213.5%.

Micron CEO Sanjay Mehrotra commented that Micron achieved record performance in fiscal year 2025, with particularly outstanding performance in the fourth quarter, demonstrating the company's leadership in technology, products, and operations. In fiscal year 2025, Micron's data center business achieved its best performance in history and entered fiscal year 2026 with strong momentum and the most competitive product portfolio to date.

First Quarter Revenue Expected to Increase Over 40%, EPS to Double Again

The performance guidance indicates that Micron expects to exceed $12 billion in single-quarter revenue for the first time in history, continuing to set revenue records after the fourth quarter. However, analysts expect it to be less than $12 billion. Micron's entire guidance range is above analysts' expectations The midpoint of the revenue guidance for the first quarter is $12.5 billion, which implies a year-on-year revenue growth of 43.5%, approximately 5% higher than analysts' expectations.

The midpoint of the EPS guidance for the first quarter is $3.75, indicating an EPS growth of 109.5% year-on-year, about 23% higher than analysts' expectations.

In terms of market conditions, Micron expects that by the calendar year 2026, which is next year, the DRAM market supply will continue to be tight, while the NAND market conditions will continue to improve. In the medium term, Micron anticipates that the compound annual growth rate of industry demand for DRAM and NAND will reach around 15%.

Micron has raised its industry demand growth forecast for the calendar year 2025, which is this year. Currently, Micron expects that the global industry DRAM bit demand growth rate will exceed 15% this year, slightly higher than the company's previous forecast. Micron also expects that the global industry NAND bit demand growth rate will also be higher than previously predicted, with an expected growth rate of 10% to 15%.

Micron invested a total of $13.8 billion in capital expenditures for the fiscal year 2025, a year-on-year increase of about 70%. Due to the continued increase in investment in 1γ DRAM and HBM-related technologies, Micron expects that capital expenditures for the fiscal year 2026 will be higher than the fiscal year 2025 level. Micron anticipates that capital expenditures in the first quarter will be approximately $4.5 billion, a nearly 44% year-on-year increase, exceeding analysts' expectations of $3.9 billion.

HBM Customers Expanded to Six, Expected to Sell Out HBM Orders for Next Year in Coming Months

While announcing the financial report, Micron CEO Sanjay Mehrotra revealed that Micron's HBM customer base has expanded to six, and it is expected that in the coming months, all of Micron's HBM products for next year will be ordered out. He stated:

"We have reached price agreements with almost all customers for the majority of HBM3E products for the calendar year 2026. We are actively discussing the specifications and supply volumes of HBM4 products with customers, and we expect to reach agreements with customers in the coming months to sell out the remaining HBM products for 2026."

HBM4 is the evolution of the current HBM3 standard, offering higher bandwidth, lower power consumption, and larger chip capacity. It features a 2048-bit interface, with a transmission rate of over 2.0 TB/s for each memory stack, improving performance by over 60% compared to the previous generation, while consuming 20% less power than Micron's currently leading HBM3E 12H products.

Since June, Micron has been sending its 36GB HBM4 12H (12-layer stacked) memory samples to major customers. The recent financial report stated that HBM4 product samples have been delivered to customers. Despite increasing external demands for HBM4 bandwidth and pin speed performance, Micron's HBM4 12H products are progressing as planned and can meet customers' platform expansion needs