ADVANCED MICRO DEVICES INC files 10-Q: quarterly report (10-Q)
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.
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 nine months ended September 26, 2026 compared to the prior year period and an analysis of changes in our financial condition .
Net revenue for the three months ended September 26, 2026 was $13.4 billion, a 45% 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 the strong demand for our AMD EPYC™ processors and the launch of our AMD Instinct™ MI450 Series GPUs, and an increase in Embedded segment revenue as demand strengthened across end markets, partially offset by a decrease in our Client and Gaming segment revenue primarily due to lower demand for semi-custom products.
Gross margin for the three months ended September 26, 2026 was 54% compared to gross margin of 52% for the prior year period, a 2 percentage point increase primarily driven by a favorable product mix, including higher Data Center segment revenue.
Operating income for the three months ended September 26, 2026 was $2.8 billion compared to operating income of $1.3 billion 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 September 26, 2026 was $2.4 billion compared to net income of $1.2 billion for the prior year period. The increase in net income was primarily driven by higher operating income.
As of September 26, 2026, our cash, cash equivalents and short-term investments were $15.8 billion compared to $10.6 billion as of December 27, 2025. During the nine months ended September 26, 2026 , we generated $6.5 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 August and September 2026, we entered into definitive agreements to acquire Taalas Inc. and World Labs Technologies, Inc. to strengthen our model research and inference capabilities and development of future super intelligence (SI) hardware, software and systems. The acquisitions are expected to close in the fourth quarter of fiscal year 2026, subject to regulatory approvals and customary closing conditions.
In August 2026, we issued $4.75 billion in aggregate principal amount of senior notes, with proceeds intended for general corporate purposes, including the repayment of debt. We also repaid in full the $875 million aggregate principal amount of our 4.212% Senior Notes as the notes matured in September 2026.
We have entered and may continue to enter into commercial arrangements to support our operations and anticipated growth, as well as the development of the broader SI infrastructure ecosystem by customers and commercial partners and expand access to our AI technologies. These arrangements include long-term capacity purchase agreements, cloud compute capacity commitments, leases (including leases for general corporate purposes and data center leases), lease guarantees and other credit support and financing arrangements. Under our cloud compute capacity arrangements, we have committed, and expect to continue to commit in the future, to purchase GPU compute capacity from cloud service providers (CSPs) either to the extent it is not successfully placed with third-party customers, or for capacity we reserved and may sell or assign to third parties. We entered into data center leases which we expect to assign or sublease to commercial partners, and provided credit support to certain commercial partners in the form of guarantees of their lease and debt obligations in the event of their default. See Note 8 - Financial Instruments, Note 10 - Leases and Note 11 - Commitments and Contingencies in Part 1, Item 1 of this Form 10-Q.
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.