10-QPeriod: Q2 FY2026

ADVANCED MICRO DEVICES INC Quarterly Report for Q2 Ended Jun 27, 2026

Filed August 5, 2026For Securities:AMD

Summary

Advanced Micro Devices (AMD) reported robust financial results for the three and six months ended June 27, 2026. The company experienced significant year-over-year revenue growth, driven primarily by strong performance in its Data Center segment, which saw a substantial increase fueled by demand for EPYC processors and Instinct GPUs. This growth, coupled with a favorable product mix and the absence of prior-year inventory charges related to export controls, led to a dramatic improvement in gross margin and a swing from an operating loss to a significant operating income. Profitability metrics across the board showed considerable improvement, with net income and earnings per share substantially higher than the prior year. The company's balance sheet remains strong, with increased cash and short-term investments, providing ample liquidity. AMD is actively managing its capital through operating cash flow generation, stock repurchases, and maintaining significant lines of credit, positioning it well for continued investment in AI and future growth opportunities. Investors should note the continued heavy investment in R&D and marketing to support its strategic AI initiatives.

Key Highlights

  • 1Net revenue surged by 50% year-over-year to $11.5 billion for the three months ended June 27, 2026, driven by strong demand across all segments, particularly Data Center.
  • 2Gross margin improved significantly to 54% from 40% in the prior year period, benefiting from a favorable product mix and the absence of specific inventory charges.
  • 3Operating income turned positive, reaching $2.0 billion compared to an operating loss of $134 million in the prior year period, reflecting improved profitability.
  • 4Net income more than doubled to $2.3 billion ($1.38 per diluted share) for the quarter, showcasing strong bottom-line performance.
  • 5Data Center segment revenue more than doubled, increasing by 107% to $6.7 billion, driven by strong demand for EPYC processors and Instinct GPUs.
  • 6Cash and cash equivalents along with short-term investments increased to $13.1 billion as of June 27, 2026, indicating a healthy liquidity position.
  • 7Research and Development expenses increased by 33% to $2.5 billion, reflecting continued investment in AI strategy and long-term growth.

Frequently Asked Questions

The primary driver of AMD's significant revenue growth is the strong performance of its Data Center segment, which experienced a 107% increase in net revenue. This growth is attributed to robust demand for AMD's EPYC processors and its Instinct MI350 Series GPUs, highlighting the company's success in the AI and high-performance computing markets.

AMD's profitability has dramatically improved, with a swing from an operating loss of $134 million to an operating income of $2.0 billion for the quarter. This improvement is primarily due to a significant increase in gross margin to 54%, driven by a favorable product mix (higher Data Center revenue) and the absence of inventory and related charges that impacted the prior year period. Additionally, strong revenue growth across segments contributed to higher gross profit.

AMD maintains a strong financial position. As of June 27, 2026, cash, cash equivalents, and short-term investments totaled $13.1 billion, an increase from $10.6 billion at the end of the previous fiscal year. The company also has a $5.0 billion revolving credit facility and a $5.5 billion commercial paper program, with no outstanding balances on either as of the reporting date. Total debt remains around $3.3 billion, indicating a well-managed leverage profile.

AMD continues to make substantial investments in its future growth. Research and Development (R&D) expenses increased by 33% to $2.5 billion for the quarter, primarily to support its AI strategy and long-term growth opportunities, driven by higher employee-related costs. Marketing, General, and Administrative (MG&A) expenses also increased by 41% to $1.4 billion, supporting go-to-market activities for revenue growth.