AMD(US:AMD)2025-11-04 21:16Financial Performance - Third quarter revenue reached a record $9.2 billion, up 36% year-over-year, with a gross margin of 52%[2] - Operating income was $1.3 billion, representing a 75% increase compared to the previous year, while net income was $1.2 billion, up 61% year-over-year[4] - For Q4 2025, AMD expects revenue to be approximately $9.6 billion, representing year-over-year growth of approximately 25%[13] - GAAP gross profit for the three months ended September 27, 2025, was $2,025 million, with a GAAP gross margin of 52%[16] - Non-GAAP gross profit for the same period was $4,992 million, reflecting a non-GAAP gross margin of 54%[16] - GAAP operating income for the quarter was $1,270 million, resulting in a GAAP operating margin of 14%[16] - Non-GAAP operating income reached $2,238 million, with a non-GAAP operating margin of 24%[16] - GAAP net income for the quarter was $1,243 million, translating to earnings per share of $0.75[16] - Non-GAAP net income was $1,965 million, with earnings per share of $1.20[16] - Basic earnings per share for Q3 2025 was $0.76, an increase from $0.54 in Q2 2025 and $0.48 in Q3 2024[24] Segment Performance - The Data Center segment generated $4.3 billion in revenue, up 22% year-over-year, driven by strong demand for AMD EPYC processors and Instinct MI350 Series GPUs[10] - Client and Gaming segment revenue was $4 billion, up 73% year-over-year, with Client revenue at a record $2.8 billion, up 46% year-over-year[10] - Data Center segment revenue was $4,341 million, up 34.1% from $3,240 million in Q2 2025 and up 22.3% from $3,549 million in Q3 2024[27] - Client and Gaming segment revenue totaled $4,048 million, a 11.8% increase from $3,621 million in Q2 2025 and a 72.6% increase from $2,343 million in Q3 2024[27] Cash Flow and Assets - Cash and cash equivalents increased to $4,808 million from $3,787 million at the end of December 2024[25] - Net cash provided by operating activities for the nine months ended September 27, 2025, was $4,189 million, compared to $1,742 million for the same period in 2024[26] - Total current assets rose to $27,000 million as of September 27, 2025, compared to $19,049 million at the end of December 2024[25] - Total assets reached $76,891 million as of September 27, 2025, up from $69,226 million at the end of December 2024[25] - Cash, cash equivalents, and short-term investments increased to $7,243 million in Q3 2025, up from $5,867 million in Q2 2025 and $4,544 million in Q3 2024[27] Expenses and Investments - The company reported a significant increase in operating expenses, with GAAP operating expenses at $3,510 million, representing 38% of revenue[16] - Research and development expenses increased to $2,139 million in Q3 2025, up from $1,894 million in Q2 2025 and $1,636 million in Q3 2024[24] - Capital expenditures for Q3 2025 were $258 million, slightly down from $282 million in Q2 2025 but up from $132 million in Q3 2024[27] Strategic Initiatives - AMD announced a strategic partnership with OpenAI to deploy 6 gigawatts of AMD GPUs for AI infrastructure, with the first deployment of 1 gigawatt set for the second half of 2026[10] - AMD's new ROCm™ 7 software was released, enhancing training and inference performance for enterprise applications[11] - AMD is focusing on strategic partnerships, including collaborations with OpenAI and Oracle, to enhance its market position[21] - AMD's FSR 4 technology saw rapid adoption, with supported games doubling to over 85 since launch[15] Future Outlook - Future outlook includes expected revenue and earnings growth driven by AMD's compute franchise and AI business[21] - Non-GAAP gross margin for Q4 2025 is expected to be approximately 54.5%[13] - Adjusted EBITDA for Q3 2025 was $2,431 million, significantly higher than $1,088 million in Q2 2025 and $1,887 million in Q3 2024[31] - Free cash flow for Q3 2025 was $1,530 million, compared to $1,180 million in Q2 2025 and $496 million in Q3 2024, reflecting a free cash flow margin of 17%[32] Debt Management - Total debt remained stable at $3,220 million in Q3 2025, compared to $3,218 million in Q2 2025 and significantly higher than $1,720 million in Q3 2024[27]