Micron Technology delivered what analysts described as one of the most exceptional quarterly performances in the history of the memory chip industry, reporting fiscal third-quarter 2026 revenue of $41.46 billion, up 346% from $9.30 billion a year earlier and 74% sequentially from the prior quarter. The result beat the Wall Street consensus of approximately $35.84 billion by more than 16%, extending Micron's streak of consecutive record quarterly revenue to five straight quarters and producing a result that materially exceeded even the highest analyst estimates in the days ahead of the print.
Adjusted earnings per share came in at $25.11, topping the $20.28 consensus by nearly 24% and more than doubling the $12.20 reported the prior quarter. Gross margin reached 84.9%, a company record, while operating income hit $33.7 billion on an extraordinary operating margin of 81.2%. Operating cash flow of $25.4 billion and free cash flow of $18.3 billion were both quarterly records, leaving Micron with $32.2 billion in liquidity and a net cash position of $24.4 billion at quarter-end. DRAM products, which accounted for 76% of total revenue at $31.3 billion, saw average selling prices climb in the low-60s percentage range quarter-over-quarter, with high-bandwidth memory sold out for all of fiscal 2026 under existing supply agreements.
Data center revenue surpassed $25 billion for the quarter, translating to an annualized run rate above $100 billion. The result stood in sharp contrast to the cyclical memory market of a year ago and distinguished Micron from peers SK Hynix and Samsung Electronics as the producer most aggressively restructuring its revenue model toward long-term contracted AI supply. Management stressed that industry demand for both DRAM and NAND continues to 'significantly exceed industry supply,' with tight market conditions projected to persist well beyond calendar 2027.
Perhaps the most consequential announcement alongside the earnings figures was the disclosure of 16 Strategic Customer Agreements, take-or-pay supply contracts covering 20% of Micron's DRAM volume and one-third of its NAND volume through 2030. The agreements carry approximately $100 billion in minimum contracted revenue and roughly $22 billion in upfront customer cash commitments already received. Management said the contracts set floor prices guaranteeing gross margins above any level achieved in any prior memory cycle, a structural change designed to permanently reduce the boom-and-bust volatility that has historically made memory stocks difficult to value at high multiples.
For fiscal fourth quarter 2026, Micron guided revenue of $50 billion plus or minus $1 billion, a non-GAAP gross margin of approximately 86%, and non-GAAP EPS of $31 plus or minus $1. The revenue guidance exceeded the analyst consensus of $43.58 billion by roughly $6.4 billion at the midpoint, one of the largest guidance beats relative to consensus seen from any large-cap technology company in recent memory. Free cash flow in the fourth quarter is expected to exceed $30 billion.
CEO Sanjay Mehrotra stated that Micron 'currently does not have line of sight as to when memory supply will be able to catch up with increasing demand,' cementing the investment thesis for a sustained high-margin environment. Analyst price targets following the print range from Goldman Sachs's conservative $1,100 to Susquehanna's $2,000 Street high, reflecting broad disagreement about how to value Micron's newly contracted-revenue model. Shares rose 17% in regular trading Thursday, with the move adding well over $100 billion in market capitalization on the day.