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Call sheet · Q1'26

Micron Technology (MU)

Q1'26 earnings call · held 2025-12-17 · compared with the Q4'25 call · management-credibility review
9/12
Disclosure score
2 medium, 6 low flags
Financial quality
Bottom line
The sleeper story everyone's missing: non-HBM DRAM margins are exploding (Core Data Center up 990bps) as supply shortages force DDR5 pricing up 20% sequentially. While analysts obsess over HBM share games, the real money is in boring server memory where Micron admits meeting only 'half to two-thirds' of customer demand. The binding constraint isn't HBM capacity but clean room space industrywide, which takes years to build. Most revealing quote: 'We are disappointed to be unable to meet demand from other customers across all market segments' - this shortage is broader and deeper than anyone realizes. My view changes if they start disclosing actual HBM revenue again or if server DRAM pricing stops accelerating despite their supply shortage claims.

The 30-second version

  • The sleeper story: Non-HBM DRAM margins are quietly exploding while everyone obsesses over HBM share games
  • They're sold out through 2026 but somehow raising CapEx $2B to $20B - the math doesn't add up
  • The LTA narrative went from 'specific commitments' to generic 'multiyear contracts' - commitment erosion in real time

What changed this quarter

MetricQ4'25Q1'26Change
Revenue$11.3B (+46% YoY)$13.6B (+57% YoY)+21% sequential acceleration
Gross Margin45.7%56.8%+1,110bps blowout expansion
EPS$3.03$4.78+58% sequential rocket ship
DRAM Revenue$9.0B$10.8B+20% seq with 20% price gains
NAND Revenue$2.3B$2.7B+22% seq, +22% YoY acceleration
Cloud Memory Business Unit Margin59%66%+620bps margin expansion
Core Data Center Business Unit Margin41%51%+990bps explosion
Mobile Client Business Unit Margin36%54%+1,700bps margin blowout
Free Cash Flow$803M$3.9B+390% record quarterly FCF
Inventory Days124 days126 days+2 days despite record shipments

Accountability tracked

8 new promises made5 narrative shifts flagged7 prior promises scored
Inside the full report
The complete write-up covers the full promise ledger with kept/missed calls, disclosure-quality scoring, the metrics-vanished check, verification items, and the questions to ask next quarter.
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Scores, kept-promise rates, and flags on this site reflect the author's opinion, applying a stated methodology to statements management made on public earnings calls. Informational and educational purposes only - not investment advice, a recommendation, or an offer to buy or sell any security. Sources believed reliable but not guaranteed; the author may hold positions in the securities discussed.

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