Micron Earnings Key Points: Long-term agreements extend to 2030, securing ~$100 billion in guaranteed revenue

Odaily reported that Micron released its earnings report this morning. Key takeaways are as follows:

1. Financial Performance (Reported Quarter)

Quarterly revenue came in at $41.46 billion (some sources report $41.5 billion), surpassing market expectations of approximately $35.8 billion.

Adjusted EPS was $25.11, exceeding the market consensus of around $20.7~$20.8.

Gross margin reached 84.9%, higher than the expected 81.9%.

2. Next Quarter Guidance (Q4)

Revenue guidance is set at $49 billion to $51 billion, with a midpoint of $50 billion, above the market estimate of $43.24 billion.

Adjusted EPS guidance is $30 to $32, with a midpoint of $31, above the market consensus of $25.31.

3. Long-Term Agreements (LTA/SCA) and Customer Commitments

16 long-term strategic customer agreements have been signed, primarily covering the period from 2026 to the end of 2030. These agreements include take-or-pay clauses. Management estimates these agreements correspond to approximately $100 billion in guaranteed revenue. The company is expected to receive around $22 billion in cash deposits and financial commitments. The signed agreements cover approximately 20% of DRAM output and about one-third of NAND output during the respective periods. Management expects that about half or more of future revenue will be covered by long-term agreements.

4. Supply, Demand, and Industry Outlook

The company expects tight supply-demand conditions for DRAM and NAND to persist beyond 2027. DRAM industry shipment volume in 2026 is projected to grow by 20%~25%, an upward revision from previous expectations. NAND industry shipment volume in 2026 is projected to grow by approximately 20%, consistent with prior guidance.

Micron's DRAM supply growth is expected to be roughly in line with the industry. Micron's NAND supply growth is expected to be slightly below the industry average.

5. Capital Expenditure and Capital Returns

Market feedback indicates that the company's capital expenditure is in line with expectations. No significantly aggressive expansion plans have been observed. The company stated it will significantly increase capital returns in Q4. The $22 billion in customer prepayments is equivalent to approximately one-third of the capital expenditure expected over the next two years.