AMD (AMD) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue reached $7.4B, up 36% year-over-year, driven by strong data center and client segment growth, with gross margin at 50% GAAP and 54% non-GAAP.

• Net income was $709M GAAP (up 476% YoY, $0.44 EPS) and $1.6B non-GAAP ($0.96 EPS, up 55% YoY), reflecting strong leverage and scale.

• The acquisition of ZT Systems was completed, enhancing rack-level AI and data center solution capabilities.

• Growth was fueled by data center, AI, and client momentum, with continued investment in R&D and go-to-market initiatives.

Financial highlights

• Data center segment revenue grew 57% year-over-year to $3.7B; client and gaming segment revenue rose 28% to $2.9B; client up 68%, gaming down 30%.

• Embedded segment revenue was $823M, down 3% year-over-year.

• GAAP operating income was $806M (up 2,139% YoY); non-GAAP operating income was $1.8B (up 57% YoY); free cash flow was $727M.

• $749M returned to shareholders via share repurchases; $1.5B in debt and $950M in commercial paper issued to fund ZT Systems acquisition.

• Cash, equivalents, and short-term investments totaled $7.3B at quarter end.

Outlook and guidance

• Q2 2025 revenue expected at ~$7.4B ± $300M, with non-GAAP gross margin at 43% (including ~$800M in inventory charges from new export controls); excluding charges, margin would be ~54%.

• Full-year 2025 revenue impact from export controls estimated at $1.5B.

• Double-digit percentage revenue growth expected for 2025, led by Zen 5 CPUs, Radeon GPUs, and Instinct MI350 accelerators.

• Non-GAAP operating expenses projected at ~$2.3B; effective tax rate ~13%.

• IRS approval of dual consolidated loss relief expected to favorably impact 2025 tax provision by ~$900M.