Advanced Micro Devices, Inc.

Advanced Micro Devices, Inc. (Nasdaq: AMD) designs processors, graphics chips, accelerators and related platforms. Data Center includes Instinct AI accelerators and EPYC server processors. Client and Gaming includes desktop and notebook processors, graphics chips and semi-custom gaming products. Embedded serves markets including industrial, communications, automotive, aerospace and defense.

Record revenue and stronger operating profit

Data-center revenue rose 97% to $8.546 billion. Client and Gaming revenue fell to $3.722 billion from $4.048 billion, with gaming revenue down sharply. Embedded revenue increased to $1.109 billion from $857 million.

Adjusted operating profit removes stock compensation, acquisition-related intangible amortization and selected other costs. Adjusted net income also removes investment gains, customer-warrant valuation changes and other items, using a separate tax adjustment.

The cash cost of expanding balances

Inventory ended the quarter at $11.463 billion, versus $8.468 billion in June. Receivables increased to $9.209 billion from $7.281 billion. These are company-wide balances; the release does not allocate the inventory increase to individual chip families.

Our full cash-statement comparison finds that five operating balance movements used $3.357 billion, versus $708 million a year earlier. The $2.649 billion deterioration exceeded the $586 million fall in continuing operating cash. Net income and the other cash-reconciliation entries together improved by $2.063 billion.

Higher accounts payable partly funded the inventory, receivables and prepaid-asset uses. Capital spending increased to $648 million from $258 million. Free cash flow subtracts capital spending from continuing operating cash.

The nine-month picture is stronger: continuing operating cash rose to $6.523 billion from $4.189 billion, and free cash flow rose to $4.678 billion from $3.437 billion.

The forecasts and customer warrants

August's third-quarter forecast was $13 billion of revenue, plus or minus $300 million, with approximately 56% adjusted gross margin. Actual revenue exceeded the top by $77 million and adjusted margin matched the forecast. The fourth-quarter outlook is $17 billion, plus or minus 3%, with approximately 55% adjusted gross margin.

The quarter included a $1.097 billion noncash charge for changes in the fair value of customer warrant liabilities.

Customer warrants give holders contractual rights to buy AMD shares. AMD says changes in its share price and other assumptions drive their remeasurement. The charge affects net earnings below operating income, separate from the operating-profit growth above.

Financing and pending acquisitions

Cash and short-term investments totaled $15.776 billion, versus $13.111 billion in June. Debt carrying amounts rose to $7.079 billion from $3.226 billion. Noncurrent operating lease liabilities of $1.837 billion are separate.

AMD closed a $4.75 billion note offering on August 17 for general corporate purposes that could include debt repayment. The quarter's statement records $4.726 billion of net debt proceeds and $875 million repaid. It also records $1.495 billion for employee share-tax withholding, distinct from discretionary program repurchases, which were zero in the quarter.

The September agreement to acquire World Labs calls for approximately $8.2 billion in stock, with the share count determined near closing. The Taalas agreement was announced in August. Both remain proposed acquisitions in the current release. AMD retained ZT Systems' design business after selling its manufacturing operation in October 2025; the cash comparisons above exclude that discontinued business.