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 and developments; the expected benefits of AMD’s acquisitions; the extent of impact of export restrictions imposed by the U.S. on our business; 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 months ended March 28, 2026 compared to the prior year period and an analysis of changes in our financial condition.
Net revenue for the three months ended March 28, 2026 was $10.3 billion, a 38% 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 5th generation 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 certain end market demand increased.
Gross margin for the three months ended March 28, 2026 was 53% compared to gross margin of 50% for the prior year period, a 3% increase primarily driven by a favorable product mix, including higher Data Center segment revenue.
Operating income for the three months ended March 28, 2026 was $1.5 billion compared to operating income of $806 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 March 28, 2026 was $1.4 billion compared to net income of $709 million for the prior year period. The increase in net income was primarily driven by higher operating income.
As of March 28, 2026, our cash, cash equivalents and short-term investments were $12.3 billion compared to $10.6 billion as of December 27, 2025. During the three months ended March 28, 2026, we generated $3.0 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 February 2026, we amended a master purchase agreement with Meta Platforms, Inc. (Meta) and Meta agreed to deploy up to 6 gigawatts of AMD GPUs, with the first gigawatt of capacity powered by custom AMD Instinct MI450-based GPU and 6th Gen AMD EPYC™ CPUs. Concurrent with the agreement, we issued to Meta a warrant to purchase up to 160 million shares of AMD’s common stock at an exercise price of $0.01 per share. The warrant will vest in tranches based on AMD Instinct GPU purchase milestones by Meta, or its affiliates, or indirectly through authorized third parties and achievement of specified AMD stock price targets. Each vested tranche is further subject to the fulfillment of certain other technical and commercial conditions by Meta prior to exercisability. The warrant is exercisable through February 23, 2031. As of March 28, 2026, none of the warrant shares had vested or become exercisable, and the warrant had no impact on our Condensed Consolidated Financial Statements for the three months then ended.
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 months ended March 28, 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 | |||||||||||||||||||||
| March 28, 2026 | March 29, 2025 | ||||||||||||||||||||
| (In millions) | |||||||||||||||||||||
| Net revenue: | |||||||||||||||||||||
| Data Center | $ | 5,775 | $ | 3,674 | |||||||||||||||||
| Client and Gaming | |||||||||||||||||||||
| Client | $ | 2,885 | $ | 2,294 | |||||||||||||||||
| Gaming | 720 | 647 | |||||||||||||||||||
| Total Client and Gaming | 3,605 | 2,941 | |||||||||||||||||||
| Embedded | 873 | 823 | |||||||||||||||||||
| Total net revenue | $ | 10,253 | $ | 7,438 | |||||||||||||||||
Cost of sales and operating expenses: | |||||||||||||||||||||
Data Center | $ | 4,176 | $ | 2,742 | |||||||||||||||||
Client and Gaming | 3,030 | 2,445 | |||||||||||||||||||
Embedded | 535 | 495 | |||||||||||||||||||
| All other | 1,036 | 950 | |||||||||||||||||||
Total cost of sales and operating expenses | $ | 8,777 | $ | 6,632 | |||||||||||||||||
Operating income (loss): | |||||||||||||||||||||
| Data Center | $ | 1,599 | $ | 932 | |||||||||||||||||
| Client and Gaming | 575 | 496 | |||||||||||||||||||
| Embedded | 338 | 328 | |||||||||||||||||||
| All other | (1,036) | (950) | |||||||||||||||||||
Total operating income | $ | 1,476 | $ | 806 | |||||||||||||||||
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Data Center
Data Center net revenue of $5.8 billion for the three months ended March 28, 2026 increased by 57%, compared to net revenue of $3.7 billion for the prior year period. The increase was primarily driven by strong demand for our 5th generation AMD EPYC™ processors and AMD Instinct™ MI350 Series GPUs.
Data Center operating income was $1.6 billion for the three months ended March 28, 2026, compared to operating income of $932 million for the prior year period. The increase in operating income was primarily driven by higher revenue, partially offset by higher cost of sales and operating expenses.
Client and Gaming
Client and Gaming net revenue of $3.6 billion for the three months ended March 28, 2026 increased by 23%, compared to net revenue of $2.9 billion for the prior year period.
Client net revenue of $2.9 billion for the three months ended March 28, 2026 increased by 26% compared to net revenue of $2.3 billion for the prior year period, primarily driven by a 25% increase in unit shipments and a 1% increase in average selling price primarily of AMD Ryzen mobile processors.
Gaming net revenue of $720 million for the three months ended March 28, 2026 increased by 11% compared to net revenue of $647 million for the prior year period, primarily driven by higher demand of our RadeonTM GPUs partially offset by lower semi-custom revenue.
Client and Gaming operating income was $575 million for the three months ended March 28, 2026, compared to operating income of $496 million for the prior year period. The increase in operating income was primarily driven by higher revenue, partially offset by higher cost of sales and operating expenses.
Embedded
Embedded net revenue of $873 million for the three months ended March 28, 2026 increased by 6%, compared to net revenue of $823 million for the prior year period. Net revenue increased as demand strengthened across several end markets.
Embedded operating income was $338 million for the three months ended March 28, 2026, compared to operating income of $328 million for the prior year period. The increase in operating income was primarily driven by higher revenue, partially offset by higher cost of sales and operating expenses.
All Other
All Other operating loss of $1.0 billion for the three months ended March 28, 2026 primarily consisted of $551 million of amortization of acquisition-related intangibles and $487 million of stock-based compensation expense. All Other operating loss of $950 million for the three months ended March 29, 2025 primarily consisted of $567 million of amortization of acquisition-related intangibles and $364 million of stock-based compensation expense.
International Sales
International sales as a percentage of net revenue were 74% and 66% for the three months ended March 28, 2026 and March 29, 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.
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Gross Margin and Expenses
The following is a summary of certain consolidated statement of operations data for the periods indicated:
| Three Months Ended | ||||||||||||||||||||||||
| March 28, 2026 | March 29, 2025 | |||||||||||||||||||||||
In millions, except percentages | ||||||||||||||||||||||||
| Net revenue | $ | 10,253 | $ | 7,438 | ||||||||||||||||||||
| Cost of sales | 4,576 | 3,451 | ||||||||||||||||||||||
| Amortization of acquisition-related intangibles | 261 | 251 | ||||||||||||||||||||||
| Gross profit | 5,416 | 3,736 | ||||||||||||||||||||||
| Gross margin | 53 | % | 50 | % | ||||||||||||||||||||
| Research and development | 2,397 | 1,728 | ||||||||||||||||||||||
| Marketing, general and administrative | 1,253 | 886 | ||||||||||||||||||||||
| Amortization of acquisition-related intangibles | 290 | 316 | ||||||||||||||||||||||
Interest expense | (37) | (20) | ||||||||||||||||||||||
| Other income (expense), net | 165 | 39 | ||||||||||||||||||||||
Income tax provision | 238 | 123 | ||||||||||||||||||||||
Income from discontinued operations, net of tax | 11 | — | ||||||||||||||||||||||
Gross Margin
Gross margin was 53% and 50% for the three months ended March 28, 2026 and March 29, 2025, respectively. The increase in gross margin was primarily due to a favorable product mix, including higher Data Center segment revenue.
Expenses
Research and Development Expenses
Research and development expenses of $2.4 billion for the three months ended March 28, 2026 increased by $669 million, or 39%, compared to $1.7 billion for the prior year period. The increase was 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 Expenses
Marketing, general and administrative expenses of $1.3 billion for the three months ended March 28, 2026 increased by $367 million, or 41%, compared to $886 million for the prior year period. The increase 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 $551 million for the three months ended March 28, 2026 decreased by $16 million, or 3%, compared to $567 million for the prior year period. The decrease was primarily due to certain acquisition-related intangibles that were fully amortized in the prior fiscal year.
Interest Expense
Interest expense for the three months ended March 28, 2026 and March 29, 2025 was $37 million and $20 million, respectively. The increase was due to the issuance of $1.5 billion in aggregate principal amount of 4.212% Notes and 4.319% Notes on March 24, 2025.
Other Income (Expense), Net
Other income (expense), net primarily consists of interest income from short-term investments, changes in valuation of long-term investments, and foreign currency transaction gains and losses.
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Other income (expense), net for the three months ended March 28, 2026 was $165 million, an increase of $126 million, or 323%, compared to $39 million for the prior year period. The increase was primarily due to unrealized gains from long-term investments and interest income from short-term investments.
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 months ended March 28, 2026, we recorded an income tax provision from continuing operations of $238 million representing an effective tax rate of 14.8%. 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), formerly FDII, and research and development (R&D) tax credits.
For the three months ended March 29, 2025, we recorded an income tax provision from continuing operations of $123 million representing an effective tax rate of 14.8%. 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 intangible income (FDII) and research and development (R&D) tax credits, partially offset by the tax rate detriment from foreign earnings.
Results of Discontinued Operations
Net income from discontinued operations for the three months ended March 28, 2026 of $11 million included measurement period adjustments related to the ZT Systems acquisition and post-close adjustments related to the sale of the ZT Manufacturing business.
FINANCIAL CONDITION
Liquidity and Capital Resources
As of March 28, 2026 and December 27, 2025, our cash, cash equivalents and short-term investments were $12.3 billion and $10.6 billion, respectively.
Our operating, investing and financing activities for the three months ended March 28, 2026 compared to the prior year period are as described below:
| Three Months Ended | |||||||||||
| March 28, 2026 | March 29, 2025 | ||||||||||
| (In millions) | |||||||||||
| Net cash provided by (used in): | |||||||||||
Operating activities of continuing operations | $ | 2,955 | $ | 939 | |||||||
Investing activities of continuing operations | (2,565) | (357) | |||||||||
Financing activities of continuing operations | (350) | 1,666 | |||||||||
Net increase in cash, cash equivalents and restricted cash | $ | 40 | $ | 2,248 | |||||||
As of March 28, 2026 and December 27, 2025, our aggregate principal short-term and long-term debt obligations were $3.3 billion.
We have $3.0 billion available under an unsecured revolving credit facility that expires on April 29, 2027. No funds were drawn from this credit facility during the three months ended March 28, 2026.
We also have a commercial paper program to issue unsecured commercial paper notes up to a maximum principal amount outstanding, at any time, of $3.0 billion, with a maturity of up to 397 days from the date of issue. We had no commercial paper outstanding as of March 28, 2026.
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As of March 28, 2026, we had unconditional commitments of approximately $25.7 billion, of which $18.3 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 $805 million and leases that have not yet commenced for $4.4 billion. In addition, as of March 28, 2026, we provided lease guarantees with maximum potential amount of future payments of $4.1 billion. For additional information on lease guarantees and commitments, refer to Notes 8 and 10 of the Notes to Condensed Consolidated Financial Statements (Part I, Item 1 of this Form 10-Q).
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 $3.0 billion in the three months ended March 28, 2026, primarily due to our net income of $1.4 billion, adjusted for non-cash and non-operating charges of $1.1 billion and net cash inflows of $456 million from changes in our operating assets and liabilities. The primary drivers of the changes in operating assets and liabilities included a $713 million increase in accrued and other liabilities driven primarily by higher customer-related accruals and a $280 million reduction in accounts receivable driven primarily by customer payments, partially offset by a $308 million increase in prepaid expenses and other assets primarily by prepayments of supply agreements.
Net cash provided by operating activities was $939 million in the three months ended March 29, 2025, primarily due to our net income of $709 million, adjusted for non-cash and non-operating charges of $1.0 billion and net cash outflows of $700 million from changes in our operating assets and liabilities. The primary drivers of the change in operating assets and liabilities were a $748 million decrease in accounts receivable due to customer payments, and a $682 million increase in inventory primarily to support the continued ramp of Data Center products in advanced process technology nodes.
Investing Activities
Net cash used in investing activities of continuing operations was $2.6 billion for the three months ended March 28, 2026, which primarily consisted of purchases of short-term investments of $2.5 billion, purchases of property and equipment of $389 million, and purchases of long-term investments of $409 million, partially offset by $778 million of proceeds from the maturity and sale of short-term investments.
Net cash used in investing activities was $357 million for the three months ended March 29, 2025, which primarily consisted of cash used in the purchases of short-term investments of $304 million, purchases of strategic investments of $239 million, and purchases of property and equipment of $212 million, partially offset by $398 million of proceeds from the maturity and sale of short-term investments.
Financing Activities
Net cash used in financing activities of continuing operations was $350 million for the three months ended March 28, 2026, which primarily consisted of stock repurchases of $221 million and stock repurchases for tax withholding on employee equity plans of $134 million.
Net cash provided by financing activities was $1.7 billion for the three months ended March 29, 2025, which primarily consisted of cash received from the issuance of senior notes for $1.5 billion and commercial paper of $950 million, partially offset by stock repurchases of $749 million and stock repurchases for tax withholding on employee equity plans of $30 million.
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Recent insider activity
| Date | Insider | Role | Action | Shares | Price | Value |
|---|---|---|---|---|---|---|
| 2026-04-24 | Papermaster Mark D | Chief Technology Officer & EVP | Sell | -31,320 | $350.00 | -$10,962,000 |
Source: SEC Form 4 filings.
Next expected filings
- ~2026-08-05 10-Q expected by 2026-08-10 (in 90 days)
- ~2026-11-04 10-Q expected by 2026-11-09 (in 181 days)
- ~2027-02-03 10-K expected by 2027-02-25 (in 272 days)
- ~2027-05-05 10-Q expected by 2027-05-10 (in 363 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 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
- 2025-12-15 8-K Officer/Director Change; Financial Statements and Exhibits
- 2025-11-05 10-Q Quarterly Report
- 2025-11-04 8-K Earnings Release; Regulation FD Disclosure; Financial Statements and Exhibits
- 2025-10-27 8-K Completion of Acquisition/Disposition; Regulation FD Disclosure; Financial Statements and Exhibits
- 2025-10-06 8-K Material Agreement Entered; Unregistered Equity Sale; Regulation FD Disclosure; Financial Statements and Exhibits
- 2025-08-25 8-K Officer/Director Change
- 2025-08-06 10-Q Quarterly Report