AMD | 10-Q: FY2026 Q1 Revenue Beats Estimate at USD 10.25 B

Revenue: As of FY2026 Q1, the actual value is USD 10.25 B, beating the estimate of USD 9.917 B.

EPS: As of FY2026 Q1, the actual value is USD 0.84, beating the estimate of USD 0.7446.

EBIT: As of FY2026 Q1, the actual value is USD 1.641 B.

Overall Company Performance

Gross Profit: $5,416 million, up from $3,736 million in the prior year .
Gross Margin: Increased to 53% from 50% in the prior year period .
Operating Income: $1,476 million, significantly higher than $806 million in the prior year .
Net Income: Increased to $1,383 million, compared to $709 million in the prior year period .
Research and Development (R&D) Expenses: Increased by 39% to $2,397 million, from $1,728 million .
Marketing, General and Administrative (MG&A) Expenses: Rose by 41% to $1,253 million, from $886 million .
Amortization of Acquisition-Related Intangibles: Decreased by 3% to $551 million, from $567 million .
Interest Expense: Increased to - $37 million from - $20 million .
Other Income (Expense), Net: Increased by 323% to $165 million, from $39 million .
Income Tax Provision: $238 million, compared to $123 million in the prior year, with an effective tax rate of 14.8% for both periods .

Segmented Operating Income

Data Center Segment Operating Income: $1,599 million, up from $932 million .
Client and Gaming Segment Operating Income: $575 million, up from $496 million .
Embedded Segment Operating Income: $338 million, up from $328 million .
All Other Category Operating Loss: - $1,036 million, primarily consisting of $551 million in amortization of acquisition-related intangibles and $487 million in stock-based compensation expense . This compares to an operating loss of - $950 million in the prior year, which included $567 million of amortization and $364 million of stock-based compensation expense .

Cash Flow

Cash and Cash Equivalents and Short-term Investments: Totaled $12.3 billion as of March 28, 2026, up from $10.6 billion as of December 27, 2025 .
Net Cash Provided by Operating Activities (Continuing Operations): $2,955 million, compared to $939 million in the prior year period . This was driven by net income, non-cash adjustments, and net cash inflows from changes in operating assets and liabilities, including a $713 million increase in accrued and other liabilities and a $280 million reduction in accounts receivable .
Net Cash Used in Investing Activities (Continuing Operations): - $2,565 million, compared to - $357 million in the prior year period . This primarily included purchases of short-term investments ($2,545 million), property and equipment ($389 million), and long-term investments ($409 million), partially offset by $778 million from maturities and sales of short-term investments .
Net Cash Used in/Provided by Financing Activities (Continuing Operations): - $350 million, compared to $1,666 million provided in the prior year . The current period’s use was mainly due to stock repurchases of $221 million and $134 million for tax withholding on employee equity plans .

Unique Metrics

Stock Repurchase Program: Advanced Micro Devices, Inc. repurchased $221 million of its common stock, with $9.2 billion remaining available under its $14 billion program .
Warrants Issued: Warrants were issued to OpenAI OpCo, LLC and Meta Platforms, Inc. in October 2025 and February 2026, respectively, allowing purchase of up to 160 million shares each at $0.01 per share, vesting based on AMD Instinct GPU purchase milestones and stock price targets .
Unconditional Commitments: Totaled approximately $25.7 billion as of March 28, 2026, with $18.3 billion due in the remainder of fiscal year 2026, primarily for wafers, substrates, components, and cloud service provider arrangements .
Lease Commitments: Future payments for leases not yet commenced amount to $4.4 billion, expected to begin in Q2 2026 .
Lease Guarantees: Advanced Micro Devices, Inc. had a maximum gross exposure of $4.1 billion from guarantees for commercial partner data center lease obligations .
ATMP Joint Ventures: Purchases from the ATMP Joint Ventures were $718 million for the three months ended March 28, 2026, and Advanced Micro Devices, Inc. recorded $6 million in equity income from the ATMP JV for the same period .

Future Outlook and Strategy

Advanced Micro Devices, Inc. believes its current cash, investments, and cash flows, along with credit facilities, will be sufficient to fund operations, capital expenditures, commitments, and strategic activities for the next 12 months and beyond . The company continues to focus on its AI strategy, increasing R&D expenses to build AI capabilities into all Client products and address significant demand for AI accelerators in the Data Center segment .