Micron Earnings Hit Record Quarter
Micron earnings reported a record fiscal Q2 with $23.9B revenue and $6.9B free cash flow; raised FQ3 targets, prompting portfolio rebalancing.
KEY TAKEAWAYS
- Micron posted a record fiscal Q2 revenue of $23.9B with unusually high gross margins.
- Micron set FQ3 revenue guidance at $33.5B, signaling continued demand momentum.
- Adjusted free cash flow was $6.9B and the board raised the quarterly dividend 30% to $0.15.
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Micron Technology reported on March 18, 2026, a record fiscal second quarter driven by strong memory demand, delivering unusually high margins and cash flow. The company raised its targets significantly for the next quarter.
Record Quarter Results and Business Mix
For the quarter ended February 26, 2026, Micron posted revenue of $23.9 billion, up 75% sequentially and 196% year-over-year. GAAP net income reached $13.8 billion with diluted earnings per share of $12.07 on 1.14 billion shares. On a non-GAAP basis, net income was $14.0 billion and diluted EPS was $12.20 on 1.15 billion shares.
Gross margins were exceptionally strong, with GAAP gross margin at 74.4% and non-GAAP at 74.9%. GAAP operating income was $16.1 billion, reflecting a 67.6% margin, while non-GAAP operating income was $16.5 billion, a 69.0% margin.
DRAM revenue totaled $18.8 billion, representing 79% of total sales and rising 207% year-over-year. By segment, Cloud Memory generated $7.7 billion with a 74% gross margin, Mobile/Client sales also reached $7.7 billion at a 79% margin, Core Data Center contributed $5.7 billion at 74%, and Automotive/Embedded brought in $2.7 billion at 68%. Chairman, President, and CEO Sanjay Mehrotra said, "In the AI era, memory has become a strategic asset for our customers, and we are investing in our global manufacturing footprint to support their growing demand."
Cash Flow, Balance Sheet, and Guidance
Operating cash flow was $11.9 billion for the quarter. After $5.0 billion in net capital expenditures, adjusted free cash flow stood at $6.9 billion.
The company held $16.7 billion in cash, marketable investments, and restricted cash. It reduced gross debt by $1.6 billion, including a senior-notes redemption, resulting in net cash of $6.5 billion.
The board approved a quarterly dividend of $0.15 per share, a 30% increase from the previous $0.115, payable April 15, 2026, with a record date of March 30, 2026.
For the fiscal third quarter ending in May 2026, Micron set revenue guidance at $33.5 billion plus or minus $0.75 billion. It expects a gross margin of about 81%, operating expenses of approximately $1.60 billion on a GAAP basis and $1.40 billion non-GAAP, and forecast GAAP diluted EPS of $18.90 plus or minus $0.40 and non-GAAP diluted EPS of $19.15 plus or minus $0.40.
"Micron set new records across revenue, gross margin, EPS, and free cash flow in fiscal Q2," Mehrotra said.
