AMD Reports First Quarter 2026 Financial Results

GAAP Quarterly Financial Results

Q1'26

Q1'25

Y/Y

Q4'25

Q/Q

Revenue ($M)

$10,253

$7,438

Up 38%

$10,270

Flat

Gross profit ($M)

$5,416

$3,736

Up 45%

$5,577

Down 3%

Gross margin

53%

50%

Up 3 ppts

54%

Down 1 ppt

Operating expenses ($M)

$3,940

$2,930

Up 34%

$3,825

Up 3%

Operating income ($M)

$1,476

$806

Up 83%

$1,752

Down 16%

Operating margin

14%

11%

Up 3 ppts

17%

Down 3 ppts

Net income ($M)

$1,383

$709

Up 95%

$1,511

Down 8%

Diluted earnings per share

$0.84

$0.44

Up 91%

$0.92

Down 9%

Non-GAAP(*) Quarterly Financial Results

Q1'26

Q1'25

Y/Y

Q4'25

Q/Q

Revenue ($M)

$10,253

$7,438

Up 38%

$10,270

Flat

Gross profit ($M)

$5,685

$3,992

Up 42%

$5,855

Down 3%

Gross margin

55%

54%

Up 1 ppt

57%

Down 2 ppts

Operating expenses ($M)

$3,145

$2,213

Up 42%

$3,001

Up 5%

Operating income ($M)

$2,540

$1,779

Up 43%

$2,854

Down 11%

Operating margin

25%

24%

Up 1 ppt

28%

Down 3 ppts

Net income ($M)

$2,265

$1,566

Up 45%

$2,519

Down 10%

Diluted earnings per share

$1.37

$0.96

Up 43%

$1.53

Down 10%

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(in millions, except per share data) (Unaudited)

Three Months Ended

March 28,
2026

December 27,
2025

March 29,
2025

GAAP gross profit

$

5,416

$

5,577

$

3,736

GAAP gross margin

53

%

54

%

50

%

Stock-based compensation

8

8

5

Amortization of acquisition-related intangibles

261

260

251

Acquisition-related and other costs ⁽¹⁾

—

1

—

Loss contingency on legal matter

—

9

—

Non-GAAP gross profit

$

5,685

$

5,855

$

3,992

Non-GAAP gross margin

55

%

57

%

54

%

GAAP operating expenses

$

3,940

$

3,825

$

2,930

GAAP operating expenses/revenue %

38

%

37

%

39

%

Stock-based compensation

479

478

359

Amortization of acquisition-related intangibles

290

297

316

Acquisition-related and other costs ⁽¹⁾

26

49

42

Non-GAAP operating expenses

$

3,145

$

3,001

$

2,213

Non-GAAP operating expenses/revenue %

31

%

29

%

30

%

GAAP operating income

$

1,476

$

1,752

$

806

GAAP operating margin

14

%

17

%

11

%

Stock-based compensation

487

486

364

Amortization of acquisition-related intangibles

551

557

567

Acquisition-related and other costs ⁽¹⁾

26

50

42

Loss contingency on legal matter

—

9

—

Non-GAAP operating income

$

2,540

$

2,854

$

1,779

Non-GAAP operating margin

25

%

28

%

24

%

Three Months Ended

March 28,
2026

December 27,
2025

March 29,
2025

GAAP net income / earnings per share

$

1,383

$

0.84

$

1,511

$

0.92

$

709

$

0.44

Stock-based compensation

487

0.30

486

0.29

364

0.22

Amortization of acquisition-related intangibles

551

0.33

557

0.34

567

0.35

Acquisition-related and other costs ⁽¹⁾

27

0.02

50

0.03

42

0.03

Loss contingency on legal matter

—

—

9

0.01

—

—

(Gains) losses on long-term investments, net

(66

)

(0.04

)

(280

)

(0.17

)

2

—

Equity income in investee

(6

)

—

(1

)

—

(7

)

—

Income tax provision

(100

)

(0.07

)

78

0.04

(111

)

(0.08

)

(Income) loss from discontinued operations, net of tax ⁽²⁾

(11

)

(0.01

)

109

0.07

—

—

Non-GAAP net income / earnings per share

$

2,265

$

1.37

$

2,519

$

1.53

$

1,566

$

0.96

(1)

Acquisition-related and other costs primarily include transaction costs, purchase price fair value adjustments for inventory, certain compensation charges, and workforce rebalancing charges.

(2)

(Income) loss from discontinued operations relates to ZT Systems' manufacturing business which was divested in the fourth quarter of 2025, and includes impact from measurement period adjustments.

(*)

In this earnings press release, in addition to GAAP financial results, AMD has provided non-GAAP financial measures including non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating expenses/revenue percent, non-GAAP operating income, non-GAAP operating margin, non-GAAP net income and non-GAAP diluted earnings per share. AMD uses a normalized tax rate in its computation of the non-GAAP income tax provision to provide better consistency across the reporting periods. For fiscal 2026, AMD used a non-GAAP tax rate of 13%, which excludes the tax impact of pre-tax non-GAAP adjustments. AMD also provides adjusted EBITDA, free cash flow and free cash flow margin as supplemental non-GAAP measures of its performance. These items are defined in the footnotes to the selected corporate data tables provided at the end of this earnings press release. AMD is providing these financial measures because it believes this non-GAAP presentation makes it easier for investors to compare its operating results for current and historical periods and also because AMD believes it assists investors in comparing AMD’s performance across reporting periods on a consistent basis by excluding items that it does not believe are indicative of its core operating performance and for the other reasons described in the footnotes to the selected data tables. The non-GAAP financial measures disclosed in this earnings press release should be viewed in addition to and not as a substitute for or superior to AMD’s reported results prepared in accordance with GAAP and should be read only in conjunction with AMD’s Consolidated Financial Statements prepared in accordance with GAAP. These non-GAAP financial measures referenced are reconciled to their most directly comparable GAAP financial measures in the data tables in this earnings press release. This earnings press release also contains forward-looking non-GAAP gross margin concerning AMD’s financial outlook, which is based on current expectations as of May 5, 2026, and assumptions and beliefs that involve numerous risks and uncertainties. Adjustments to arrive at the GAAP gross margin outlook typically include stock-based compensation, amortization of acquired intangible assets and acquisition-related and other costs. The timing and impact of such adjustments are dependent on future events that are typically uncertain or outside of AMD's control, therefore, a reconciliation to equivalent GAAP measures is not practicable at this time. AMD undertakes no intent or obligation to publicly update or revise its outlook statements as a result of new information, future events or otherwise, except as may be required by law.

©2026 Advanced Micro Devices, Inc. All rights reserved. AMD, the AMD Arrow logo, 3D V-Cache, Alveo, AMD Instinct, EPYC, FidelityFX, Kria, Radeon, Ryzen, Threadripper, Ultrascale+, Versal, Zynq, and combinations thereof, are trademarks of Advanced Micro Devices, Inc. 

Three Months Ended

March 28,
2026

December 27,
2025

March 29,
2025

Net revenue

$

10,253

$

10,270

$

7,438

Cost of sales

4,576

4,433

3,451

Amortization of acquisition-related intangibles

261

260

251

Total cost of sales

4,837

4,693

3,702

Gross profit

5,416

5,577

3,736

Gross margin

53

%

54

%

50

%

Research and development

2,397

2,330

1,728

Marketing, general and administrative

1,253

1,198

886

Amortization of acquisition-related intangibles

290

297

316

Total operating expenses

3,940

3,825

2,930

Operating income

1,476

1,752

806

Interest expense

(37

)

(36

)

(20

)

Other income (expense), net

165

358

39

Income from continuing operations before income taxes and equity income

1,604

2,074

825

Income tax provision

238

455

123

Equity income in investee

6

1

7

Income from continuing operations, net of tax

1,372

1,620

709

Income (loss) from discontinued operations, net of tax

11

(109

)

—

Net income

$

1,383

$

1,511

$

709

Earnings (loss) per share:

Basic earnings from continuing operations

$

0.84

$

1.00

$

0.44

Basic earnings (loss) from discontinued operations

$

0.01

$

(0.07

)

$

—

Basic earnings per share

$

0.85

$

0.93

$

0.44

Diluted earnings from continuing operations

$

0.83

$

0.99

$

0.44

Diluted earnings (loss) from discontinued operations

$

0.01

$

(0.07

)

$

—

Diluted earnings per share

$

0.84

$

0.92

$

0.44

Shares used in per share calculation

Basic

1,631

1,630

1,620

Diluted

1,650

1,649

1,626

March 28,
2026

December 27,
2025

(Unaudited)

ASSETS

Current assets:

Cash and cash equivalents

$

5,585

$

5,539

Short-term investments

6,762

5,013

Accounts receivable, net

6,035

6,315

Inventories

8,045

7,920

Prepaid expenses and other current assets

2,201

2,160

Total current assets

28,628

26,947

Property and equipment, net

2,723

2,312

Goodwill

25,344

25,126

Acquisition-related intangibles, net

16,154

16,705

Deferred tax assets

476

384

Other non-current assets

6,317

5,452

Total Assets

$

79,642

$

76,926

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

$

2,997

$

2,929

Accrued liabilities

5,785

5,250

Current portion of long-term debt, net

874

874

Other current liabilities

850

402

Total current liabilities

10,506

9,455

Long-term debt

2,350

2,348

Long-term operating lease liabilities

647

625

Deferred tax liabilities

307

313

Other long-term liabilities

1,370

1,186

Stockholders' equity:

Capital stock:

Common stock, par value $0.01

17

17

Additional paid-in capital

63,856

63,365

Treasury stock, at cost

(7,421

)

(7,079

)

Retained earnings

8,082

6,699

Accumulated other comprehensive loss

(72

)

(3

)

Total stockholders' equity

64,462

62,999

Total Liabilities and Stockholders' Equity

$

79,642

$

76,926

Three Months Ended

March 28,
2026

March 29,
2025

Cash flows from operating activities:

Net income

$

1,383

$

709

(Income) from discontinued operations, net of tax

(11

)

—

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

206

175

Amortization of acquisition-related intangibles

551

567

Stock-based compensation

487

364

(Gains) losses on long-term investments, net

(66

)

2

Deferred income taxes

(79

)

(167

)

Other

28

37

Changes in operating assets and liabilities:

Accounts receivable, net

280

748

Inventories

(125

)

(682

)

Prepaid expenses and other assets

(308

)

(237

)

Accounts payable

(104

)

(289

)

Accrued and other liabilities

713

(288

)

Net cash provided by operating activities of continuing operations

2,955

939

Cash flows from investing activities:

Purchases of property and equipment

(389

)

(212

)

Purchases of short-term investments

(2,545

)

(304

)

Proceeds from maturity of short-term investments

652

365

Proceeds from sale of short-term investments

126

33

Purchases of long-term investments

(409

)

(239

)

Net cash used in investing activities of continuing operations

(2,565

)

(357

)

Cash flows from financing activities:

Proceeds from debt and commercial paper issuance, net of issuance costs

—

2,441

Proceeds from sales of common stock through employee equity plans

5

4

Repurchases of common stock

(221

)

(749

)

Stock repurchases for tax withholding on employee equity plans

(134

)

(30

)

Net cash (used in) provided by financing activities of continuing operations

(350

)

1,666

Net increase in cash, cash equivalents and restricted cash

40

2,248

Cash, cash equivalents and restricted cash at beginning of period

5,556

3,811

Cash, cash equivalents and restricted cash at end of period

$

5,596

$

6,059

Reconciliation of cash, cash equivalents and restricted cash

Cash and cash equivalents

$

5,585

$

6,049

Restricted cash included in Prepaid expenses and other current assets

11

10

Cash, cash equivalents and restricted cash at end of period

$

5,596

$

6,059

Three Months Ended

March 28,
2026

December 27,
2025

March 29,
2025

Segment and Disaggregated Revenue Information ⁽¹⁾

Net Revenue:

Data Center Segment

$

5,775

$

5,380

$

3,674

Client and Gaming Segment

Client

2,885

3,097

2,294

Gaming

720

843

647

Total Client and Gaming

3,605

3,940

2,941

Embedded Segment

873

950

823

Total net revenue

$

10,253

$

10,270

$

7,438

Operating Income (Loss):

Data Center Segment

$

1,599

$

1,752

$

932

Client and Gaming Segment

575

725

496

Embedded Segment

338

357

328

All other

(1,036

)

(1,082

)

(950

)

Total operating income

$

1,476

$

1,752

$

806

Other Data

Capital expenditures

$

389

$

222

$

212

Adjusted EBITDA ⁽²⁾

$

2,746

$

3,048

$

1,954

Cash, cash equivalents and short-term investments

$

12,347

$

10,552

$

7,310

Free cash flow ⁽³⁾

$

2,566

$

2,082

$

727

Total assets

$

79,642

$

76,926

$

71,550

Total debt

$

3,224

$

3,222

$

4,164

(1)

The Company operates as three operating segments, Data Center, Client and Gaming, and Embedded segments.

The Data Center segment primarily includes 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.

The Client and Gaming segment primarily includes CPUs, APUs, chipsets for desktops and notebooks, discrete GPUs, and semi-custom SoC products and development services.

The Embedded segment primarily includes embedded CPUs, APUs, FPGAs, System on Modules (SOMs), and adaptive SoC products.

From time to time, the Company may also sell or license portions of its IP portfolio.

All Other category primarily includes certain expenses and credits that are not allocated to any of the operating segments, such as amortization of acquisition-related intangibles, employee stock-based compensation expense, and acquisition-related and other costs.

(2)

Reconciliation of GAAP Net Income to Adjusted EBITDA

Three Months Ended

(Millions) (Unaudited)

March 28,
2026

December 27,
2025

March 29,
2025

GAAP net income

$

1,383

$

1,511

$

709

Interest expense

37

36

20

Other (income) expense, net

(165

)

(358

)

(39

)

Income tax provision (benefit)

238

455

123

Equity income in investee

(6

)

(1

)

(7

)

Stock-based compensation

487

486

364

Depreciation and amortization

206

194

175

Amortization of acquisition-related intangibles

551

557

567

Acquisition-related and other costs

26

50

42

Loss contingency on legal matter

—

9

—

(Income) loss from discontinued operations, net of tax

(11

)

109

—

Adjusted EBITDA

$

2,746

$

3,048

$

1,954

The Company presents “Adjusted EBITDA” as a supplemental measure of its performance. Adjusted EBITDA for the Company is determined by adjusting GAAP net income for interest expense, other (income) expense, net, income tax provision (benefit), equity income in investee, stock-based compensation, depreciation and amortization expense, amortization of acquisition-related intangibles, acquisition-related and other costs, loss contingency on legal matter, and (income) loss from discontinued operations, net of tax. The Company calculates and presents Adjusted EBITDA because management believes it is of importance to investors and lenders in relation to its overall capital structure and its ability to borrow additional funds. In addition, the Company presents Adjusted EBITDA because it believes this measure assists investors in comparing its performance across reporting periods on a consistent basis by excluding items that the Company does not believe are indicative of its core operating performance. The Company’s calculation of Adjusted EBITDA may or may not be consistent with the calculation of this measure by other companies in the same industry. Investors should not view Adjusted EBITDA as an alternative to the GAAP operating measure of net income or GAAP liquidity measures of cash flows from operating, investing and financing activities. In addition, Adjusted EBITDA does not take into account changes in certain assets and liabilities that can affect cash flows.

(3)

Reconciliation of GAAP Net Cash Provided by Operating Activities of Continuing Operations to Free Cash Flow

Three Months Ended

(Millions except percentages) (Unaudited)

March 28,
2026

December 27,
2025

March 29,
2025

GAAP net cash provided by operating activities of continuing operations

$

2,955

$

2,304

$

939

Operating cash flow margin % from continuing operations

29

%

22

%

13

%

Purchases of property and equipment

(389

)

(222

)

(212

)

Free cash flow

$

2,566

$

2,082

$

727

Free cash flow margin %

25

%

20

%

10

%

The Company also presents free cash flow as a supplemental Non-GAAP measure of its performance. Free cash flow is determined by adjusting GAAP net cash provided by operating activities of continuing operations for capital expenditures, and free cash flow margin % is free cash flow expressed as a percentage of the Company's net revenue. The Company calculates and communicates free cash flow in the financial earnings press release because management believes it is of importance to investors to understand the nature of these cash flows. The Company’s calculation of free cash flow may or may not be consistent with the calculation of this measure by other companies in the same industry. Investors should not view free cash flow as an alternative to GAAP liquidity measures of cash flows from operating activities.