Advanced Micro Devices, Inc.
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PART I
ITEM 1. BUSINESS
Cautionary Statement Regarding Forward-Looking Statements
The statements in this report include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations and beliefs and involve numerous risks and uncertainties that could cause actual results to differ materially from expectations. These forward-looking statements speak only as of the date hereof or as of the dates indicated in the statements and should not be relied upon as predictions of future events, as we cannot assure you that the events or circumstances reflected in these statements will be achieved or will occur. You can identify forward-looking statements by the use of forward-looking terminology including “believes,” “expects,” “may,” “will,” “should,” “seeks,” “intends,” “plans,” “pro forma,” “estimates,” “anticipates,” or the negative of these words and phrases, other variations of these words and phrases or comparable terminology. The forward-looking statements relate to, among other things: possible impact of future accounting rules on AMD’s consolidated financial statements; demand for AMD’s products; AMD’s strategy and expected benefits; the growth, change and competitive landscape of the markets in which AMD participates; international sales will continue to be a significant portion of total sales in the foreseeable future; the expectation that AMD’s cash, cash equivalents, and short-term investments together with the availability under that certain revolving credit facility (the Revolving Credit Agreement) made available to AMD and certain of its subsidiaries, our commercial paper program, and our cash flows from operations will be sufficient to fund AMD’s operations, including capital expenditures, purchase and lease commitments and strategic activities over the next 12 months and beyond; AMD’s ability to obtain sufficient external financing on favorable terms, or at all; AMD’s expectation that based on management’s current knowledge, the potential liability related to AMD’s current litigation will not have a material adverse effect on its financial position, results of operation or cash flows; anticipated ongoing and increased costs related to enhancing and implementing information security controls; revenue allocated to remaining performance obligations that are unsatisfied which will be recognized in the next 12 months; a small number of customers will continue to account for a substantial part of AMD’s revenue and receivables in the future; the expected implications from the development of the legal and regulatory environment relating to emerging technologies such as AI; AMD’s expectation to utilize the cloud service capacity in its operations or assign the capacity; AMD’s expectation that it will not pay dividends in the near future; AMD’s ability to achieve its corporate responsibility initiatives; expected future AI technology trends and developments; the expected benefits of AMD’s acquisitions; and AMD’s expectation to fund stock repurchases through cash generated from operations. For a discussion of the factors that could cause actual results to differ materially from the forward-looking statements, see “Part I, Item 1A—Risk Factors” and the “Financial Condition” section set forth in “Part II, Item 7-Management’s Discussion and Analysis of Financial Condition and Results of Operations,” or MD&A, and such other risks and uncertainties as set forth below in this report or detailed in our other Securities and Exchange Commission (SEC) reports and filings. We assume no obligation to update forward-looking statements.
Additionally, we make certain voluntary disclosures in this report and on our website, which are informed by various standards and frameworks (including standards for the measurement of underlying data), and the interests of various stakeholders. As such, these voluntary disclosures may not necessarily be “material” under the federal securities laws for SEC reporting purposes. Furthermore, much of this information is subject to methodological considerations or information, including from third-parties, that is still evolving and subject to change, and which AMD does not independently verify. For example, our disclosures based on any standards may change due to revisions in framework requirements, availability of information, changes in our business or applicable government policies, or other factors, some of which may be beyond our control.
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References in this Annual Report on Form 10-K to “AMD,” “we,” “us,” “management,” “our” or the “Company” mean Advanced Micro Devices, Inc. and our consolidated subsidiaries.
Overview
AMD drives innovation in high performance and AI computing to solve the world’s most important challenges. AMD technology powers billions of experiences across cloud and AI infrastructure, embedded systems, AI PCs and gaming. With a broad portfolio of AI-optimized CPUs, GPUs, networking and software, AMD delivers full-stack solutions that help customers turn data into breakthroughs, with the speed and scale needed for a new era of intelligent computing. Our high-performance product portfolios provide differentiated solutions, including semi-custom System-on-Chip (SoCs), adaptive SoCs and accelerated processing units (APUs). For data centers, we offer AI accelerators, microprocessors (CPUs), graphic processing units (GPUs), data processing units (DPUs), AI Network Interface Cards (AI NICs) and field programmable gate arrays (FPGAs). We offer ultra-low latency networking solutions. We also offer data center rack-scale platform designs that incorporate AMD data center products to meet the growing performance demands of AI supercomputers and machine learning workloads. In client computing, our CPUs, APUs and chipsets for desktops and notebooks deliver performance, efficiency, AI capabilities and modern security features for gamers, creators, consumers and enterprises. AMD was the first company to integrate a dedicated neural processing unit (NPU) on the same SoC as an x86 CPU for AI PCs. By bringing NPU‑accelerated AI capabilities directly into mainstream x86 platforms, we established a differentiated technology footprint that supports a growing ecosystem of AI‑enabled applications and lays the groundwork for the multi‑generation Ryzen™ AI roadmap that continues to expand our leadership. Our GPUs, including discrete GPUs and semi-custom SoCs, are combined with software to power immersive gaming experiences across PCs, game consoles and cloud gaming services. Our embedded computing portfolio delivers high-performance, scalable solutions across CPUs, APUs, FPGAs, System-on-Modules (SOMs) and adaptive SoCs for markets such as automotive, industrial, healthcare, storage and networking with integrated AI processing capabilities.
We develop comprehensive software stacks that include development tools, compilers and drivers to enable our high-performance CPUs, APUs, GPUs and FPGAs. We have a comprehensive and open AI software stack to support the diverse set of AI ecosystems across frameworks, large and small language models and applications. By working closely with customers, we deliver customized solutions that meet their evolving needs, leveraging our broad IP portfolio and leadership in design, integration and advanced packaging. Our investments in technologies such as our custom-ready chiplet platform and AMD Infinity Fabric™ switch position us to maintain our leadership as a custom-design silicon provider of choice.
Our Strategy
We believe AI is shaping the next era of computing and its full potential will be realized when it becomes pervasive across cloud, edge and endpoint devices. With our compute engines, intellectual property, software enablement and deep expertise, AMD is positioned to lead in this next computing era. Our broad portfolio spans supercomputing, cloud, edge, embedded and end devices, providing the unique opportunity to make AMD the end-to-end AI leader.
In 2025, a key priority was accelerating growth in our Data Center segment. Demand for our data center AI accelerator products was strong as large hyperscale customers, OEMs and ODMs deployed our AMD Instinct™ MI350X Series GPUs. We advanced our AMD AI GPU roadmap to deliver an annual cadence of leadership for AMD Instinct solutions, beginning with the AMD Instinct MI350 Series GPUs in 2025. Beyond GPUs, we launched the 5th Gen AMD EPYC™ family of server processors in 2025, which deliver leadership performance and capabilities for a wide range of data center workloads, including AI. In addition, we previewed our “Helios” AI rack-scale platform solution that incorporates all of our data center products (CPUs, GPUs and Networking) to address the growing AI compute requirements.
We strengthened our AI leadership through a number of strategic acquisitions during the year. In March 2025, we acquired ZT Group Int’l, Inc. (ZT Systems), where we retained certain intellectual property and employees associated with the design operations (ZT Design Business). This acquisition enables us to deliver end-to-end AI solutions and accelerate the design and deployment of AMD-powered AI infrastructure at scale optimized for the cloud. In October 2025, we sold the ZT data center infrastructure manufacturing business (ZT Manufacturing Business) to Sanmina Corporation (Sanmina). We made other strategic acquisitions during the year to advance our software capabilities and enable highly optimized solutions across the stack, support co-packaged optics solutions for next-generation AI systems, and bring deep expertise in high-speed inference and reasoning-based AI technologies for large-scale deployments.
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We believe that AI systems will require not only powerful chips, but also full-stack innovation across compute, networking, systems architecture and software. AMD is uniquely positioned to deliver across this stack, combining industry-leading CPUs, GPUs and adaptive SoCs with networking, software and system integration expertise. We continue to invest in software capabilities and the open ecosystem through the AMD ROCm™ platform, delivering new features for high-performance AI training and inference. In 2025, we introduced key optimizations and expanded support for frameworks and libraries, improving performance for generative AI workloads and simplifying the developer experience.
In October 2025, we entered into a product purchase agreement with OpenAI OpCo, LLC, (OpenAI) to deploy 6 gigawatts of AMD GPUs, with the deployment of the first gigawatt of capacity powered by our AMD Instinct MI450 series products. This multiyear strategic partnership with OpenAI demonstrates our continued execution of hardware, software and full-stack solutions roadmaps.
Our Business
Beginning in the first quarter of fiscal year 2025, we combined the Client and Gaming segments into one reportable segment to align with how we manage our business. All prior period segment data were retrospectively adjusted.
Our three reportable segments are:
•the Data Center segment, which primarily includes AI accelerators, CPUs for servers, GPUs, APUs, DPUs, AI NICs, FPGAs and SoC products for data centers;
•the Client and Gaming segment, which primarily includes CPUs, APUs, chipsets for desktops and notebooks, discrete GPUs, and semi-custom SoC products and development services; and
•the Embedded segment, which primarily includes embedded CPUs, APUs, FPGAs, SOMs, and adaptive SoC products.
From time to time, the Company may also sell or license portions of its IP portfolio.
In addition to these reportable segments, we have an All Other category, which is not a reportable segment.
Data Center Segment
Data Center Market
The Data Center segment primarily includes server-class CPUs, GPUs, AI accelerators, DPUs, AI NICs, FPGAs, and adaptive SoC products. We leverage our technology to address the computational, visual data processing and AI workload acceleration needs in the data center market. Modern data centers require high performance, energy efficient, scalable and adaptable compute engines to meet the demand driven by the growing amount of data that needs to be stored, accessed, analyzed and managed. Different combinations of CPUs, GPUs, DPUs, AI NICs, FPGAs and adaptive SoCs enable the optimization of performance and power for a diverse set of workloads.
Data Center Products
Server CPUs. Our CPUs for server platforms currently include the AMD EPYC™ Series processors. EPYC CPUs, which are based on the x86 architecture, are server-specific processors designed for high-performance computing, enterprise IT, supercomputing, and large data centers. Our 5th generation AMD EPYC family of server processors delivers improved performance and efficiency for AI, cloud and enterprise workloads.
Data Center GPUs. Our AMD Instinct™ family of GPU products, including AMD Instinct MI200, MI300, MI325 and MI350 series, are based on AMD CDNA™ architecture and designed for AI training, inference and exascale-class scientific computing. We also announced next-generation AMD Instinct MI355X GPUs for large-scale AI deployments. Our visual cloud GPU offerings include products in the AMD Radeon™ PRO V families. Our visual cloud data center GPUs include a range of solutions tailored towards workloads requiring remote visualization, such as Desktop-as-a-Service, Workstation-as-a-Service and Cloud Gaming.
FPGAs and Adaptive SoCs. We offer a wide range of FPGAs, adaptive SoCs and acceleration cards for the data center. Devices include the Virtex™, Kintex™, Artix™, and Spartan™ FPGA products, as well as Zynq™ and Versal™ adaptive SoCs. Our Alveo™ accelerator cards provide a platform for accelerating multiple data center workloads at the edge or in the cloud.
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Networking Products. Our AMD Pensando™ DPUs and comprehensive networking software stack offload data center infrastructure services from the host CPU and are used by large Infrastructure as a Service (IaaS) cloud providers to accelerate workload performance for hosted virtualized and bare-metal offerings. We introduced our AMD Pensando “Pollara” 400 AI NICs and “Vulcano” AI NICs, which deliver high-speed connectivity across GPU clusters providing high-performance, AI-ready, flexible solutions for scale-out networking.
The AMD Solarflare™ portfolio continues to offer low latency networking solutions for capital markets, including hardware adapters and the Onload™ user space networking libraries.
Client and Gaming Segment
Client Business
Client Market
Our CPUs and APUs power PCs that are an integral part of how customers work, learn and play. The Client market encompasses the global personal computing ecosystem, including desktop and notebook PCs sold primarily through OEMs, distributors and select direct customers. Our products consist mainly of x86 CPUs and APUs marketed under the AMD Ryzen™ and AMD Ryzen™ AI brands for consumer, commercial and enthusiast segments. Our customers focus on a combination of performance, efficiency, reliability, and value that aligns with their specific use cases. We built a leadership roadmap across these areas and are continuing to further differentiate end user experiences by infusing AI across our portfolio.
Client Products
Desktop CPUs. Our desktop CPU and APU offerings include the AMD Ryzen™ and AMD Ryzen Threadripper™ processors. The Ryzen 9000 Series processors feature “Zen 5” cores, along with X3D models featuring 2nd generation AMD 3D V-Cache™ technology for leadership gaming performance. In 2025, we launched processors for gaming and content creation with Ryzen 9 9950X3D and Ryzen 9 9900X3D. In January 2026, we announced the Ryzen 7 9850X3D, in addition to our Ryzen 7 9800X3D series. Our Ryzen Threadripper™ 9000 Series processors for professional workstations feature increased core counts, expanded memory bandwidth and updated platform capabilities. Our portfolio also includes a broad range of Ryzen 9000 and Ryzen series desktop processors featuring a wide range of capabilities and price points for the growing Socket AM5 platform. In 2025, we released additional AMD Ryzen G Series processors with integrated advanced graphics to extend the longevity of the Socket AM4 platform.
Notebook CPUs. Our latest mobile processors are designed to deliver premium laptop experiences with local AI. In 2025, we launched AMD Ryzen AI 300 Series processors featuring a next generation NPU supporting Microsoft Copilot+ PCs, our latest “Zen 5” architecture and our AMD RDNA™ 3.5 graphics architecture. In January 2026, we launched our Ryzen AI 400 series processors, the next generation of processors for AI PCs. Building on our AI PC momentum, we expanded our portfolio by introducing Ryzen AI-powered platforms across notebooks and mini desktops and introduced a new reference platform for AI developers in January 2026, the Ryzen AI Halo, that features up to 128GB of memory for large AI model support. We also expanded the Ryzen AI Max processor lineup with the Ryzen AI Max+392 and Ryzen AI Max+388 to enable wider price points for our maximum GPU configurations. Our AMD Ryzen 8000 Series mobile processors, built on the “Zen 4” architecture feature our first generation NPU, and our Ryzen 10 and 100 series mobile processors, powered by both our “Zen 2” and “Zen 3+” core architectures, all address mainstream consumer and commercial markets. For handheld gaming systems, our Ryzen Z1 Series continues to deliver immersive experiences, and we introduced the Ryzen Z2 Series, bringing higher efficiency and improved graphics performance for portable gaming devices including the new Asus ROG Xbox Ally.
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Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
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| ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
The statements in this report include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations and beliefs and involve numerous risks and uncertainties that could cause actual results to differ materially from expectations. These forward-looking statements speak only as of the date hereof or as of the dates indicated in the statements and should not be relied upon as predictions of future events, as we cannot assure you that the events or circumstances reflected in these statements will be achieved or will occur. You can identify forward-looking statements by the use of forward-looking terminology including “believes,” “expects,” “may,” “will,” “should,” “seeks,” “intends,” “plans,” “pro forma,” “estimates,” “anticipates,” or the negative of these words and phrases, other variations of these words and phrases or comparable terminology. The forward-looking statements relate to, among other things: possible impact of future accounting rules on AMD’s condensed consolidated financial statements; demand for AMD’s products; AMD’s strategy and expected benefits; the growth, change and competitive landscape of the markets in which AMD participates; the expectation that international sales will continue to be a significant portion of total sales in the foreseeable future; the expectation that AMD’s cash, cash equivalents, short-term investments and cash flows from operations along with our revolving credit facility and our commercial paper program will be sufficient to fund AMD’s operations, capital expenditures, commitments and strategic activities over the next 12 months and beyond; AMD’s ability to access capital markets; AMD’s expectation that based on management’s current knowledge, the potential liability related to AMD’s current litigation will not have a material adverse effect on its financial positions, results of operations or cash flows; anticipated ongoing and increased costs related to enhancing and implementing information security controls; the expectation that revenue allocated to remaining performance obligations that are unsatisfied will be recognized in the next 12 months; that a small number of customers will continue to account for a substantial part of AMD’s revenue and receivables in the future; the expected implications from the development of the legal and regulatory environment relating to emerging technologies, such as AI; AMD’s expectation to utilize the cloud service capacity in its operations or assign the capacity; AMD’s ability to achieve its corporate responsibility initiatives; compliance costs associated with new or developing sustainability laws and requirements; expected future AI technology trends, developments and growth; the expected benefits of AMD’s acquisitions; the extent of impact of export restrictions imposed by the U.S. on our business; expected shipment of the Helios rack-scale platforms; expected gain on the transfer of appreciated assets related to the acquisition of ZT Group Int’l, Inc.; AMD’s future investment commitments and commencement of future payments under data center leases; and AMD’s expectation to fund stock repurchases through cash generated from operations. For a discussion of the factors that could cause actual results to differ materially from the forward-looking statements, see “Part II, Item 1A—Risk Factors” and the “Financial Condition” section set forth in “Part I, Item 2-Management’s Discussion and Analysis of Financial Condition and Results of Operations,” or MD&A, and such other risks and uncertainties as set forth below in this report or detailed in our other Securities and Exchange Commission (SEC) reports and filings. We assume no obligation to update forward-looking statements.
References in this Quarterly Report on Form 10-Q to “AMD,” “we,” “us,” “management,” “our” or the “Company” mean Advanced Micro Devices, Inc. and our consolidated subsidiaries.
AMD, the AMD Arrow logo, AMD Instinct, EPYC, Radeon, Ryzen, Xilinx and combinations thereof are trademarks of Advanced Micro Devices, Inc. Other names are for informational purposes only and are used to identify companies and products and may be trademarks of their respective owners. “Zen” is a codename for an AMD architecture and is not a product name.
The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and related notes included in this report and our audited consolidated financial statements and related notes as of December 27, 2025 and December 28, 2024, and for each of the three years for the period ended December 27, 2025 as filed in our Annual Report on Form 10-K for the fiscal year ended December 27, 2025.
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Overview and Recent Developments
We are a global semiconductor company primarily offering:
•Artificial Intelligence (AI) accelerators, microprocessors (CPUs) for servers, graphics processing units (GPUs), accelerated processing units (APUs), data processing units (DPUs), AI Network Interface Cards (AI NICs), Field Programmable Gate Arrays (FPGAs) and adaptive System-on-Chip (SoC) products for data centers;
•CPUs, APUs, chipsets for desktops and notebooks, discrete GPUs, semi-custom SoC products and development services; and
•embedded CPUs, APUs, FPGAs, System on Modules (SOMs), and adaptive SoC products.
From time to time, we may also sell or license portions of our intellectual property (IP) portfolio.
In this section, we will describe the general financial condition and the results of operations of Advanced Micro Devices, Inc. and its wholly-owned subsidiaries (collectively, “we”, “us,” “our”, “AMD” or the “Company”), including a discussion of our results of operations for the three and six months ended June 27, 2026 compared to the prior year period and an analysis of changes in our financial condition.
Net revenue for the three months ended June 27, 2026 was $11.5 billion, a 50% increase compared to the prior year period. The increase in net revenue was driven by an increase in Data Center segment revenue primarily driven by strong demand for our AMD EPYC™ processors and AMD Instinct™ MI350 Series GPUs, an increase in Client and Gaming segment revenue, primarily driven by strong demand for our AMD Ryzen™ processors and an increase in Embedded segment revenue as demand strengthened across end markets.
Gross margin for the three months ended June 27, 2026 was 54% compared to gross margin of 40% for the prior year period, a 14% increase primarily driven by the absence of inventory and related charges associated with the U.S. government export control on AMD Instinct MI308 Data Center GPU products that was recorded in the prior year period and a favorable product mix, including higher Data Center segment revenue.
Operating income for the three months ended June 27, 2026 was $2.0 billion compared to operating loss of $134 million for the prior year period. The increase in operating income was due to higher gross profit, partially offset by higher operating expenses. Net income for the three months ended June 27, 2026 was $2.3 billion compared to net income of $872 million for the prior year period. The increase in net income was primarily driven by higher operating income.
As of June 27, 2026, our cash, cash equivalents and short-term investments were $13.1 billion compared to $10.6 billion as of December 27, 2025. During the six months ended June 27, 2026, we generated $5.3 billion of cash from operating activities and we returned $221 million to stockholders through the repurchase of common stock under our stock repurchase program (Repurchase Program).
In October 2025 and February 2026, we entered into multi-year agreements with OpenAI OpCo, LLC (OpenAI) and Meta Platforms, Inc. (Meta), respectively, under which each customer intends to deploy up to 6 gigawatts of AMD data center GPUs, with the first gigawatt of each deployment powered by our AMD Instinct MI450 series products. In connection with these agreements, we issued each customer a warrant to purchase up to 160 million shares of our common stock at an exercise price of $0.01 per share, vesting in tranches tied to AMD Instinct GPU purchase milestones and specified AMD stock price and/or performance conditions. As of June 27, 2026, no warrant tranches had vested or become exercisable, and the warrants had no impact on our results for the three and six months ended June 27, 2026.
We intend the discussion of our financial condition and results of operations that follows to provide information that will assist in understanding our financial statements, the changes in certain key items in those financial statements from period to period, the primary factors that resulted in those changes, and how certain accounting principles, policies and estimates affect our financial statements.
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Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP). The preparation of our financial statements requires us to make estimates and judgments that affect the reported amounts in our consolidated financial statements. We evaluate our estimates on an ongoing basis, including those related to our revenue, inventories, goodwill, long-lived and intangible assets, business combination accounting and income taxes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Although actual results have historically been reasonably consistent with management’s expectations, the actual results may differ from these estimates or our estimates may be affected by different assumptions or conditions.
There have been no significant changes for the three and six months ended June 27, 2026 to the items that we disclosed as our critical accounting estimates in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of our Annual Report on Form 10-K for the fiscal year ended December 27, 2025.
Results of Continuing Operations
Each of the Client and Gaming businesses do not qualify as a separate reportable operating segment, however, we continue to separately disclose revenues for each business. Our operating results tend to vary seasonally. Historically, our net revenue has been generally higher in the second half of the year than in the first half of the year, although market conditions and product transitions could impact this trend.
The following table provides a summary of net revenue and operating income (loss) by segment:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 27, 2026 | June 28, 2025 | June 27, 2026 | June 28, 2025 | ||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||
| Net revenue: | |||||||||||||||||||||||
| Data Center | $ | 6,718 | $ | 3,240 | $ | 12,493 | $ | 6,914 | |||||||||||||||
| Client and Gaming | |||||||||||||||||||||||
| Client | 3,062 | 2,499 | 5,947 | 4,793 | |||||||||||||||||||
| Gaming | 779 | 1,122 | 1,499 | 1,769 | |||||||||||||||||||
| Total Client and Gaming | 3,841 | 3,621 | 7,446 | 6,562 | |||||||||||||||||||
| Embedded | 977 | 824 | 1,850 | 1,647 | |||||||||||||||||||
| Total net revenue | $ | 11,536 | $ | 7,685 | $ | 21,789 | $ | 15,123 | |||||||||||||||
Cost of sales and operating expenses: | |||||||||||||||||||||||
Data Center | $ | 4,615 | $ | 3,395 | $ | 8,791 | $ | 6,137 | |||||||||||||||
Client and Gaming | 3,259 | 2,854 | 6,289 | 5,299 | |||||||||||||||||||
Embedded | 591 | 549 | 1,126 | 1,044 | |||||||||||||||||||
| All other | 1,081 | 1,021 | 2,117 | 1,971 | |||||||||||||||||||
Total cost of sales and operating expenses | $ | 9,546 | $ | 7,819 | $ | 18,323 | $ | 14,451 | |||||||||||||||
Operating income (loss): | |||||||||||||||||||||||
| Data Center | $ | 2,103 | $ | (155) | $ | 3,702 | $ | 777 | |||||||||||||||
| Client and Gaming | 582 | 767 | 1,157 | 1,263 | |||||||||||||||||||
| Embedded | 386 | 275 | 724 | 603 | |||||||||||||||||||
| All other | (1,081) | (1,021) | (2,117) | (1,971) | |||||||||||||||||||
| Total operating income (loss) | $ | 1,990 | $ | (134) | $ | 3,466 | $ | 672 | |||||||||||||||
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Data Center
Data Center net revenue of $6.7 billion for the three months ended June 27, 2026 increased by 107%, compared to net revenue of $3.2 billion for the prior year period. Data Center net revenue of $12.5 billion for the six months ended June 27, 2026 increased by 81%, compared to net revenue of $6.9 billion for the prior year period. The increase in both periods was primarily driven by strong demand for our AMD EPYC processors and AMD Instinct MI350 Series GPUs.
Data Center operating income was $2.1 billion for the three months ended June 27, 2026, compared to operating loss of $155 million for the prior year period. Data Center operating income was $3.7 billion for the six months ended June 27, 2026, compared to operating income of $777 million for the prior year period. The increase in operating income in both periods was primarily driven by higher revenue and the absence of inventory and related charges associated with the U.S. government export control on AMD Instinct MI308 Data Center GPU products that was recorded in the prior year period, partially offset by higher cost of sales and operating expenses.
Client and Gaming
Client and Gaming net revenue of $3.8 billion for the three months ended June 27, 2026 increased by 6%, compared to net revenue of $3.6 billion for the prior year period. Client and Gaming net revenue of $7.4 billion for the six months ended June 27, 2026 increased by 13%, compared to net revenue of $6.6 billion for the prior year period.
Client net revenue of $3.1 billion for the three months ended June 27, 2026 increased by 23% compared to net revenue of $2.5 billion for the prior year period, primarily driven by a 34% increase in unit shipments of client processors, partially offset by a 6% decrease in average selling price of client processors. Client net revenue of $5.9 billion for the six months ended June 27, 2026 increased by 24% compared to net revenue of $4.8 billion for the prior year period, primarily driven by a 29% increase in unit shipments of client processors, partially offset by a 3% decrease in average selling price of client processors. The increase in unit shipments in both periods was primarily driven by AMD Ryzen mobile processors and the decrease in average selling price in both periods was primarily due to a shift in mix of Ryzen processor sales, including lower AMD Ryzen desktop processors sales.
Gaming net revenue of $779 million for the three months ended June 27, 2026 decreased by 31% compared to net revenue of $1.1 billion for the prior year period, primarily due to lower semi-custom revenue. Gaming net revenue of $1.5 billion for the six months ended June 27, 2026 decreased by 15% compared to net revenue of $1.8 billion for the prior year period, primarily due to lower semi-custom revenue, partially offset by higher sales of our RadeonTM GPUs.
Client and Gaming operating income was $582 million for the three months ended June 27, 2026, compared to operating income of $767 million for the prior year period. Client and Gaming operating income was $1.2 billion for the six months ended June 27, 2026, compared to operating income of $1.3 billion for the prior year period. The decrease in operating income in both periods was primarily due to higher operating expenses.
Embedded
Embedded net revenue of $977 million for the three months ended June 27, 2026 increased by 19%, compared to net revenue of $824 million for the prior year period. Embedded net revenue of $1.9 billion for the six months ended June 27, 2026 increased by 12%, compared to net revenue of $1.6 billion for the prior year period. Net revenue increased in both periods as demand strengthened across end markets.
Embedded operating income was $386 million for the three months ended June 27, 2026, compared to operating income of $275 million for the prior year period. Embedded operating income was $724 million for the six months ended June 27, 2026, compared to operating income of $603 million for the prior year period. The increase in operating income in both periods was primarily driven by higher revenue, partially offset by higher cost of sales and operating expenses.
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All Other
All Other operating loss of $1.1 billion for the three months ended June 27, 2026 primarily consisted of $544 million of amortization of acquisition-related intangibles and $503 million of stock-based compensation expense. All Other operating loss of $1.0 billion for the three months ended June 28, 2025 primarily consisted of $568 million of amortization of acquisition-related intangibles and $369 million of stock-based compensation expense.
All Other operating loss of $2.1 billion for the six months ended June 27, 2026 primarily consisted of $1.1 billion of amortization of acquisition-related intangibles and $990 million of stock-based compensation expense. All Other operating loss of $2.0 billion for the six months ended June 28, 2025 primarily consisted of $1.1 billion of amortization of acquisition-related intangibles and $733 million of stock-based compensation expense.
International Sales
International sales, based on billing location of customers who purchased directly from us, were 70% and 71% of net revenue for the three months ended June 27, 2026 and June 28, 2025, respectively, and 72% and 69% of net revenue for the six months ended June 27, 2026 and June 28, 2025, respectively. We expect that international sales will continue to be a significant portion of total sales in the foreseeable future. Substantially all of our sales transactions were denominated in U.S. dollars.
Gross Margin and Expenses
The following is a summary of certain consolidated statement of operations data for the periods indicated:
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
| June 27, 2026 | June 28, 2025 | June 27, 2026 | June 28, 2025 | |||||||||||||||||||||||
In millions, except percentages | ||||||||||||||||||||||||||
| Net revenue | $ | 11,536 | $ | 7,685 | $ | 21,789 | $ | 15,123 | ||||||||||||||||||
| Cost of sales | 5,073 | 4,366 | 9,649 | 7,817 | ||||||||||||||||||||||
| Amortization of acquisition-related intangibles | 260 | 260 | 521 | 511 | ||||||||||||||||||||||
| Gross profit | 6,203 | 3,059 | 11,619 | 6,795 | ||||||||||||||||||||||
| Gross margin | 54 | % | 40 | % | 53 | % | 45 | % | ||||||||||||||||||
| Research and development | 2,528 | 1,894 | 4,925 | 3,622 | ||||||||||||||||||||||
| Marketing, general and administrative | 1,401 | 991 | 2,654 | 1,877 | ||||||||||||||||||||||
| Amortization of acquisition-related intangibles | 284 | 308 | 574 | 624 | ||||||||||||||||||||||
Interest expense | (37) | (38) | (74) | (58) | ||||||||||||||||||||||
| Other income (expense), net | 598 | 98 | 763 | 137 | ||||||||||||||||||||||
| Income tax provision (benefit) | 252 | (834) | 490 | (711) | ||||||||||||||||||||||
| Income (loss) from discontinued operations, net of tax | (8) | 104 | 3 | 104 | ||||||||||||||||||||||
Gross Margin
Gross margin was 54% and 40% for the three months ended June 27, 2026 and June 28, 2025, respectively. Gross margin was 53% and 45% for the six months ended June 27, 2026 and June 28, 2025, respectively. The increase in both periods was driven by the absence of inventory and related charges associated with the U.S. government export control on AMD Instinct MI308 Data Center GPU products that was recorded in the prior year period and a favorable product mix, including higher Data Center segment revenue.
26
Expenses
Research and Development (R&D) Expenses
R&D expenses of $2.5 billion for the three months ended June 27, 2026 increased by $0.6 billion, or 33%, compared to $1.9 billion for the prior year period. R&D expenses of $4.9 billion for the six months ended June 27, 2026 increased by $1.3 billion, or 36%, compared to $3.6 billion for the prior year period. The increase in both periods was primarily due to higher employee-related costs from an increase in headcount in support of our continued focus on our AI strategy and long-term growth opportunities.
Marketing, General and Administrative (MG&A) Expenses
MG&A expenses of $1.4 billion for the three months ended June 27, 2026 increased by $0.4 billion, or 41%, compared to $1.0 billion for the prior year period. MG&A expenses of $2.7 billion for the six months ended June 27, 2026 increased by $0.8 billion, or 41%, compared to $1.9 billion for the prior year period. The increase in both periods was primarily due to an increase in go‑to‑market activities to support our revenue growth.
Amortization of Acquisition-Related Intangibles
Amortization of acquisition-related intangibles of $544 million for the three months ended June 27, 2026 decreased by $24 million, or 4%, compared to $568 million for the prior year period. Amortization of acquisition-related intangibles of $1,095 million for the six months ended June 27, 2026 decreased by $40 million, or 4%, compared to $1,135 million for the prior year period. The decrease in both periods was primarily due to certain acquisition-related intangibles that were fully amortized in the prior fiscal year.
Interest Expense
Interest expense for the three and six months ended June 27, 2026 was $37 million and $74 million, respectively. Interest expense for the three and six months ended June 28, 2025 was $38 million and $58 million, respectively. The decrease for the three month period was primarily due to the absence of commercial paper borrowings. The increase for the six month period was due to the issuance of $1.5 billion in aggregate principal amount of our 4.212% Senior Notes due 2026 (4.212% Notes) and 4.319% Senior Notes due 2028 (4.319% Notes) on March 24, 2025.
Other Income (Expense), Net
Other income (expense), net primarily consists of interest income, gains and losses from investments, and foreign currency transaction gains and losses.
Other income (expense), net for the three months ended June 27, 2026 was $598 million, an increase of $500 million, or 510%, compared to $98 million for the prior year period. Other income (expense), net for the six months ended June 27, 2026 was $763 million, an increase of $626 million, or 457%, compared to $137 million for the prior year period. The increase in both periods was primarily driven by unrealized gains from the public market listing of non-marketable equity securities during the second quarter of fiscal year 2026.
Income Taxes
We determine income taxes for interim reporting periods by applying our estimated annual effective tax rate to the year-to-date results and adjusted for tax items discrete to each period.
For the three and six months ended June 27, 2026, we recorded an income tax provision from continuing operations of $252 million and $490 million representing an effective tax rate of 9.8% and 11.8%, respectively. The difference between the U.S. federal statutory tax rate of 21% and our estimated annual effective tax rate was primarily due to the income tax benefit from foreign-derived deduction eligible income (FDDEI) and research and development (R&D) tax credits.
27
For the three and six months ended June 28, 2025, we recorded an income tax benefit from continuing operations of $834 million and $711 million representing an effective tax rate of 1,263.6% and (92.8)%, respectively. The tax benefit for the three and six months ended June 28, 2025 reflected a discrete tax benefit of $792 million and $781 million, respectively, primarily due to a tax benefit of $853 million related to the release of uncertain tax positions pertaining to the reasonable cause relief for dual consolidated losses approved by the Internal Revenue Service (IRS) in April 2025, partially offset by other items, including deferred tax expense associated with the expected gain on the transfer of appreciated assets related to the acquisition of ZT Group Int’l, Inc. (ZT Systems).
Results of Discontinued Operations
Net income (loss) from discontinued operations for the three and six months ended June 27, 2026 of $(8) million and $3 million included tax provision adjustments.
FINANCIAL CONDITION
Liquidity and Capital Resources
As of June 27, 2026 and December 27, 2025, our cash, cash equivalents and short-term investments were $13.1 billion and $10.6 billion, respectively.
Our operating, investing and financing activities for the six months ended June 27, 2026 compared to the prior year period are as described below:
| Six Months Ended | |||||||||||
| June 27, 2026 | June 28, 2025 | ||||||||||
| (In millions) | |||||||||||
| Net cash provided by (used in): | |||||||||||
| Net cash provided by operating activities of continuing operations | $ | 5,321 | $ | 2,401 | |||||||
| Net cash provided by operating activities of discontinued operations | — | 549 | |||||||||
| Operating activities | 5,321 | 2,950 | |||||||||
| Net cash used in investing activities of continuing operations | (5,172) | (2,633) | |||||||||
| Net cash used in investing activities of discontinued operations | (243) | (22) | |||||||||
| Investing activities | (5,415) | (2,655) | |||||||||
| Financing activities of continuing operations | (365) | 347 | |||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | $ | (459) | $ | 642 | |||||||
We have $5.0 billion available under an unsecured revolving credit facility that expires in 2031. We also have a commercial paper program to issue unsecured commercial paper notes up to a maximum principal amount outstanding, at any time, of $5.5 billion, with a maturity of up to 397 days from the date of issue. We had no commercial paper and revolving credit amounts outstanding as of June 27, 2026.
As of June 27, 2026 and December 27, 2025, our aggregate principal short-term and long-term debt obligations were $3.3 billion.
As of June 27, 2026, we had unconditional commitments of approximately $30.3 billion, of which $17.4 billion are for the remainder of fiscal year 2026. Our contractual obligations and purchase commitments relate primarily to our obligations to purchase wafers, substrates and components from third parties and future payments related to multi-year cloud service provider arrangements, and certain software and technology licenses. We work continually with our suppliers and partners on the timing of payments and deliveries of purchase commitments, taking into account business conditions. We also have commitments for leases that have commenced for approximately $1.2 billion and leases that have not yet commenced for $4.5 billion. In addition, as of June 27, 2026, we have data center lease guarantees with maximum potential amount of future payments of $4.1 billion. Subsequent to June 27, 2026, we entered into investment commitments of up to $5.0 billion, subject to certain conditions, which are expected to be made through fiscal year 2028 and long-term data center leases with aggregate future payments of $9.5 billion over lease terms of up to 16 years that are expected to commence in 2027 and 2028.
28
We believe our cash, cash equivalents, short-term investments and cash flows from operations along with our revolving credit facility and commercial paper program will be sufficient to fund operations, capital expenditures, commitments and strategic activities over the next 12 months and beyond. We believe we will be able to access the capital markets should we require additional funds. However, we cannot assure that such funds will be available on favorable terms, or at all.
Operating Activities
Our working capital cash inflows and outflows from operations are primarily cash collections from our customers, payments for inventory purchases and payments for employee-related expenditures.
Net cash provided by operating activities of continuing operations was $5.3 billion in the six months ended June 27, 2026, primarily due to our net income of $3.7 billion, adjusted for non-cash and non-operating charges of $1.9 billion and net cash outflows of $274 million from changes in our operating assets and liabilities. The primary drivers of the changes in operating assets and liabilities included a $966 million increase in accounts receivable driven primarily by higher revenue, a $1.0 billion increase in prepaid expenses and other assets primarily due to prepayments of supply agreements, partially offset by a $2.2 billion increase in accounts payable primarily due to timing of payment obligations.
Net cash provided by operating activities of continuing operations was $2.4 billion in the six months ended June 28, 2025, primarily due to our net income of $1.6 billion, adjusted for non-cash and non-operating charges of $1.2 billion and net cash outflows of $284 million from changes in our operating assets and liabilities. The primary drivers of the change in operating assets and liabilities were a $1.1 billion decrease in accounts receivable due to higher receipts of customer payments and a $943 million increase in inventory primarily to support the continued ramp of Client and Data Center products in advanced process technology nodes. Net cash provided by operating activities of ZT Systems' data center infrastructure manufacturing business (ZT Manufacturing Business), classified as discontinued operations, was $549 million.
Investing Activities
Net cash used in investing activities of continuing operations was $5.2 billion for the six months ended June 27, 2026, which primarily consisted of purchases of short-term investments of $4.6 billion, purchases of property and equipment of $1.2 billion, and purchases of long-term investments of $844 million, partially offset by $1.6 billion of proceeds from the maturity and sale of short-term investments. Net cash used in investing activities of discontinued operations was $243 million, which represents payment for customary net working capital adjustments related to the divestiture of the ZT Manufacturing Business.
Net cash used in investing activities of continuing operations was $2.6 billion for the six months ended June 28, 2025, which primarily consisted of cash used in acquisitions of $1.7 billion, the purchases of short-term investments of $796 million, purchases of strategic investments of $358 million, and purchases of property and equipment of $494 million, partially offset by $731 million of proceeds from the maturity and sale of short-term investments. Net cash used in investing activities of the ZT Manufacturing Business, classified as discontinued operations, was $22 million due to purchases of equipment.
Financing Activities
Net cash used in financing activities of continuing operations was $365 million for the six months ended June 27, 2026, which primarily consisted of stock repurchases of $221 million and stock repurchases for tax withholding on employee equity plans of $341 million, partially offset by proceeds from the issuance of common stock through employee equity plans of $205 million.
Net cash provided by financing activities of continuing operations was $347 million for the six months ended June 28, 2025, which primarily consisted of cash received from the issuance of senior notes of $1.5 billion and $950 million of commercial paper, partially offset by stock repurchases of $1.2 billion. There was no net cash provided by financing activities of discontinued operations for the six months ended June 28, 2025.
29
Recent insider activity
| Date | Insider | Role | Action | Shares | Price | Value |
|---|---|---|---|---|---|---|
| 2026-08-11 | Hahn Ava | SVP, GC & Corporate Secretary | Sell | -143 | $474.75 | -$67,889 |
| 2026-07-15 | Papermaster Mark D | Chief Technology Officer & EVP | Sell | -6,000 | $556.43 | -$3,338,580 |
| 2026-06-15 | Papermaster Mark D | Chief Technology Officer & EVP | Sell | -6,000 | $536.33 | -$3,217,980 |
| 2026-06-10 | Su Lisa T | Chair, President & CEO | Sell | -125,000 ×27 | $460.69 | -$57,585,715 |
| 2026-06-02 | Denzel Nora | Director | Sell | -8,626 | $522.00 | -$4,502,772 |
| 2026-05-29 | Denzel Nora | Director | Sell | -1,821 | $522.00 | -$950,562 |
| 2026-05-20 | Norrod Forrest Eugene | EVP & GM DESG | Sell | -19,487 ×9 | $431.40 | -$8,406,784 |
Source: SEC Form 4 filings.
Next expected filings
- ~2026-11-04 10-Q expected by 2026-11-09 (in 80 days)
- ~2027-02-03 10-K expected by 2027-02-25 (in 171 days)
- ~2027-05-05 10-Q expected by 2027-05-10 (in 262 days)
- ~2027-08-04 10-Q expected by 2027-08-09 (in 353 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-08-14 424B5 Prospectus Supplement
- 2026-08-13 S-3ASR S-3ASR
- 2026-08-05 10-Q Quarterly Report
- 2026-08-04 8-K Earnings Release; Regulation FD Disclosure; Financial Statements and Exhibits
- 2026-07-01 8-K Officer/Director Change
- 2026-05-15 8-K Material Agreement Entered; Material Agreement Terminated; Material Financial Obligation; Officer/Director Change; Shareholder Vote Results; Financial Statements and Exhibits
- 2026-05-15 S-8 Employee Benefit Plan Registration
- 2026-05-06 10-Q Quarterly Report
- 2026-05-05 8-K Earnings Release; Regulation FD Disclosure; Financial Statements and Exhibits
- 2026-02-24 8-K Material Agreement Entered; Unregistered Equity Sale; Regulation FD Disclosure; Financial Statements and Exhibits
- 2026-02-17 8-K Officer/Director Change
- 2026-02-04 10-K Annual Report
- 2026-02-04 10-K/A Annual Report (Amended)
- 2026-02-03 8-K Earnings Release; Regulation FD Disclosure; Financial Statements and Exhibits
- 2026-01-20 8-K Officer/Director Change; Financial Statements and Exhibits