Micron (MU) Q3 FY2026: 80% Operating Margin as DRAM ASPs More Than Triple
Micron's third quarter is not a recovery quarter. It is the most profitable quarter in the company's history, and the margin sits roughly 31 percentage points above its own previous cycle peak — though note that comparison sets a quarterly margin against an annual one. Revenue reached $41,456 million against $9,301 million a year earlier, and operating income of $33,318 million produced an 80.4% operating margin — against a 49.3% peak in FY2018 and a 19.1% average across fiscal 2017 through fiscal 2025 (simple averages of annual GAAP operating margins, company annual reports). What makes the quarter worth reading closely is not the size of the number but its durability: management has begun converting spot pricing into multi-year take-or-pay contracts, and the terms of those contracts — not the current price of DRAM — will decide how much of this earnings power survives the next downturn.
1. Consolidated Balance Sheet
1-1. Major asset items
| Item | Aug 28, 2025 ($M) | May 28, 2026 ($M) | Change % |
|---|---|---|---|
| Cash and cash equivalents | 9,642 | 24,995 | +159.2% |
| Receivables | 9,265 | 31,025 | +234.9% |
| — of which trade receivables | 7,163 | 26,894 | +275.5% |
| Inventories | 8,355 | 8,567 | +2.5% |
| Property, plant, and equipment | 46,590 | 56,426 | +21.1% |
| Intangible assets | 453 | 473 | +4.4% |
| Total assets | 82,798 | 134,112 | +62.0% |
Total assets grew 62% in nine months. The balance sheet did not expand evenly, and the unevenness is the story.
Receivables rose 235%, which looks alarming until it is measured against sales. Days sales outstanding — how long the company waits to get paid — was essentially unchanged at 59.0 days, against roughly 58 days at the August 2025 fiscal year end ($7,163 million of trade receivables against $11.32 billion of fourth-quarter FY2025 revenue, per the FY2025 Form 10-K). The receivable build tracks revenue rather than outrunning it. Note also that $3,408 million of the receivable line is government incentives owed to Micron, not customer money. Trade receivables alone are $26,894 million.
