AMD Reports Second Quarter 2025 Financial Results

Core Insights - AMD reported record revenue of $7.7 billion for Q2 2025, a 32% increase year-over-year, despite facing export control impacts that led to $800 million in inventory charges [1][2][5] - The company achieved a net income of $872 million, up 229% from the previous year, with diluted earnings per share of $0.54 [1][2][5] - AMD's gross margin was 40% on a GAAP basis and 43% on a non-GAAP basis, reflecting a decline from previous quarters due to export restrictions [1][4][5] Financial Performance - Revenue for Q2 2025 was $7,685 million, compared to $5,835 million in Q2 2024, marking a 32% year-over-year increase and a 3% increase from Q1 2025 [5][22] - Gross profit was $3,059 million with a gross margin of 40%, down from 49% in Q2 2024 and 50% in Q1 2025 [5][22] - Operating loss was $134 million, a significant decline from an operating income of $269 million in Q2 2024 [5][22] - Non-GAAP operating income was $897 million, down 29% year-over-year [5][22] Segment Performance - Data Center segment revenue reached $3.2 billion, up 14% year-over-year, driven by strong demand for AMD EPYC processors [6] - Client and Gaming segment revenue was $3.6 billion, up 69% year-over-year, with client revenue at a record $2.5 billion [6] - Embedded segment revenue was $824 million, down 4% year-over-year due to mixed demand in end markets [7] Strategic Developments - AMD announced new AI solutions and partnerships at the Advancing AI 2025 event, including the AMD Instinct MI350 Series GPUs and a collaboration with HUMAIN to advance global AI infrastructure [10] - The company is positioned for growth in the second half of 2025, driven by the ramp-up of new products and ongoing market demand [2][11] - AMD plans to sell ZT Systems' data center infrastructure manufacturing business to Sanmina for $3 billion, expected to close by the end of 2025 [10] Future Outlook - For Q3 2025, AMD expects revenue to be approximately $8.7 billion, representing a year-over-year growth of about 28% [11] - Non-GAAP gross margin is anticipated to be around 54%, excluding any revenue from AMD Instinct MI308 shipments to China due to ongoing license reviews [11]