10-QPeriod: Q3 FY2025

ADVANCED MICRO DEVICES INC Quarterly Report for Q3 Ended Sep 27, 2025

Filed November 5, 2025For Securities:AMD

Summary

Advanced Micro Devices, Inc. (AMD) reported robust financial results for the third quarter and first nine months of fiscal year 2025. Total net revenue increased by 36% year-over-year for the quarter to $9.25 billion and by 34% for the nine-month period to $24.37 billion. This growth was primarily fueled by strong performance in the Data Center segment, driven by demand for EPYC processors and Instinct GPUs, and significant expansion in the Client and Gaming segment, bolstered by Ryzen processors and gaming GPUs. The company also saw an improvement in gross margin to 52% for the quarter, up from 50% in the prior year period, although the nine-month gross margin decreased slightly due to inventory charges related to export controls. Net income also saw substantial growth, reaching $1.24 billion for the quarter and $2.82 billion for the nine months, representing significant increases over the prior year. The company completed the acquisition of ZT Systems in March 2025, integrating its data center infrastructure capabilities, though the manufacturing division was subsequently classified as held for sale and entered into an agreement for divestiture. AMD also strengthened its balance sheet, with cash, cash equivalents, and short-term investments growing to $7.2 billion. Despite a substantial increase in operating expenses, particularly in research and development and marketing, the company's strategic investments appear to be driving top-line growth and market expansion, especially in the AI-related computing space.

Financial Highlights

54 data points
Beta

Revenue

$9.25B

51.7% Gross Margin

Net Income

$1.24B

13.4% Net Margin

EPS (Diluted)

$0.75

Total Assets

$76.89B

Cash & Equivalents

$4.81B

Free Cash Flow

$1.90B

Financial Statements
Beta
Revenue$9.25B
Cost of Revenue$4.47B
Gross Profit$4.78B
R&D Expenses$2.14B
SG&A Expenses$1.07B
Operating Expenses$3.51B
Operating Income$1.27B
Interest Expense$37.00M
Net Income$1.24B
EPS (Basic)$0.76
EPS (Diluted)$0.75
Shares Outstanding (Basic)1.63B
Shares Outstanding (Diluted)1.64B

Key Highlights

  • 1Strong revenue growth driven by Data Center and Client/Gaming segments, with Data Center revenue up 22% QoQ and Client/Gaming up 73% QoQ.
  • 2Significant increase in net income for the quarter ($1.24 billion) and nine months ($2.82 billion) compared to the prior year.
  • 3Gross margin improved to 52% for the quarter, reflecting favorable product mix, though nine-month margin was impacted by inventory charges.
  • 4Completed the acquisition of ZT Systems to bolster AI solutions and data center infrastructure capabilities.
  • 5Increased investment in Research and Development by 31% QoQ and Marketing, General & Administrative by 51% QoQ to support AI strategy and revenue growth.
  • 6Cash, cash equivalents, and short-term investments increased to $7.2 billion, indicating a strong liquidity position.
  • 7Initiated a new $6 billion share repurchase program, adding to existing authorization.

Frequently Asked Questions

Revenue growth was primarily driven by strong demand in the Data Center segment for AMD's 5th generation EPYC processors and Instinct GPUs, and significant growth in the Client and Gaming segment, attributed to robust sales of Ryzen processors and gaming GPUs, as well as semi-custom game console SoCs.

The acquisition of ZT Systems was completed in March 2025 and contributed to the company's strategic expansion in AI solutions and data center infrastructure. The financial impact includes the initial purchase consideration and subsequent reclassification of the manufacturing business as held for sale, with an agreement to divest.

The decrease in gross margin for the nine-month period was primarily due to approximately $800 million in inventory and related charges associated with U.S. government export controls on AMD Instinct MI308 Data Center GPU products. This was partially offset by a richer mix of Ryzen processor sales.

AMD is significantly increasing its investment in Research and Development (up 31% QoQ) to support its AI strategy, evidenced by the introduction of new AI accelerators and GPUs. Marketing, General and Administrative expenses also saw a substantial increase (up 51% QoQ) to support go-to-market activities for revenue growth.