AMD (AMD) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue reached $10.3 billion, up 38% year-over-year, driven by strong growth in Data Center (up 57%), Client, and Gaming segments, with Embedded returning to growth.

• GAAP diluted EPS increased 91% year-over-year to $0.84; non-GAAP EPS rose 43% to $1.37.

• Net income was $1.4 billion GAAP and $2.3 billion non-GAAP, with record free cash flow of $2.6 billion and operating cash flow of $3.0 billion.

• Data Center is now the primary driver of revenue and earnings, fueled by AI infrastructure demand and strong sales of EPYC CPUs and Instinct GPUs.

• The company is well-positioned to exceed long-term financial targets, including delivering more than $20 in EPS over the strategic timeframe.

Financial highlights

• Gross margin reached 55% non-GAAP and 53% GAAP, up year-over-year due to favorable product mix and higher Data Center contribution.

• Operating income was $2.5 billion non-GAAP (25% margin) and $1.5 billion GAAP (14% margin), both up significantly year-over-year.

• Free cash flow hit a record $2.6 billion, representing 25% of revenue; operating cash flow was $3.0 billion.

• Cash and short-term investments totaled $12.3 billion at quarter-end.

• Net income nearly doubled year-over-year to $1.4 billion (GAAP); non-GAAP net income up 45% to $2.3 billion.

Outlook and guidance

• Q2 2026 revenue expected at ~$11.2 billion ± $300 million, up 46% year-over-year and 9% sequentially, led by strong Data Center and Embedded growth.

• Non-GAAP gross margin guided to 56%; operating expenses to $3.3 billion; effective tax rate at 13%.

• Server CPU revenue projected to grow over 70% year-over-year in Q2, with robust growth continuing into 2027.

• Second half gaming revenue expected to decline more than 20% versus first half due to higher memory and component costs.

• Management expects international sales to remain a significant portion of total sales.