Micron announced its much-anticipated balance sheet. My first comment is that the picture is really promising and appetizing for our investments. Now, let's look at the segments one by one and try to make sense of what this stock, which is the biggest carrier of the rally we are experiencing, tells us about the trend. Revenue came in at $41.5 billion, against expectations of $35 billion. As for earnings per share, while the expectation was 20 dollars, we are greeted with a result of 25 dollars. Gross profit margin is 84.9 percent. These were the headlines, but for a more meaningful interpretation, what we really need to look at are revenues segment by segment.
Memory is historically the hardest commodity of all; when the price hits bottom, the producer loses money; even on the best of days, the margin barely reaches 50 percent. 85 percent margin is almost unheard of in a commodity, that's the margin of a software company. Such a thing only happens in a real shortage where the buyer has no choice. More importantly, Micron did this well above its own forecast, because three months ago they had forecast revenue of 33.5 billion for the quarter and margins of approximately 81 percent. The demand is happening even faster than those who know it best model it, which is very positive for those of us who have these investments.
Now let's look at where the revenue comes from, because the real information is in the segments. The biggest item is Cloud Memory, that is, memory going to hyperscalers, with 13.8 billion dollars. In second place is Core Data Center with 11.5 billion, where the gross margin increases to 87 percent. Add the two together and nearly 60 percent of revenue comes from one place: the data center. We now need to read Micron as the main supplier of the artificial intelligence data center rather than a memory company.
The mobile and PC side, which is the least talked about but perhaps one of the most important parts of the business, brought in $11.5 billion and an operating margin of 86 percent. This is worth stopping and thinking. Phone and computer memory is the cheapest, most common side of memory, normally with a low margin. The fact that it works at almost the same profitability as artificial intelligence memory shows that the shortage is no longer in a single product, but spread across the entire sector. As capacity shifts to the data center, memory is becoming scarce everywhere, from phones to cars, and prices are getting steeper in every segment.
Even automobiles and embedded systems confirm this. That segment brought in $4.6 billion, the expectation was 3.5 billion, so even the most obscure segment exceeded expectations by thirty percent. All four segments operate at operating margins of 75 to 86 percent.
The cash side is at least as strong as income. They generated $25.4 billion in operating cash in the quarter, with free cash flow of 18.3 billion. On the other hand, investment expenditure is 7.1 billion. In other words, the company finances its capacity expansion not with external debt, but with the cash it generates, and on top of that, it distributes dividends. There is $30 billion in the safe, meaning the power to finance growth is in your pocket.
On the product side, the direction is also up. HBM4, the latest generation of AI memory, is being shipped in high volume to the main customer, and samples have been shipped to multiple new customers, reducing dependence on a single buyer. On the storage side, shipment of a new generation SSD of 245 terabytes has started. Micron isn't just selling chips, it's also expanding its product line to higher-value AI products.
The forward-looking guide completes this entire picture. They expect $50 billion in revenue and margins of about 86 percent for the fourth quarter. At the top of a cycle, the forecast should have slowed, but momentum is increasing. In its balance sheet statement, the management says that the congestion will extend beyond 2027, because the new factories established will not produce meaningful production before the 2028 fiscal year.
