AMD (AMD) Q2 2026 earnings summary

Executive summary

• Achieved record quarterly revenue of $11.5 billion, up 50% year-over-year, driven by strong Data Center, Embedded, and Client segment growth, with Data Center revenue more than doubling to $6.7 billion and representing 58% of total revenue.

• Non-GAAP gross margin rose to 56%, and non-GAAP operating income reached $3.1 billion; GAAP gross margin was 54%, with GAAP operating income at $2.0 billion.

• Net income reached $2.3 billion, with diluted EPS of $1.38 (GAAP) and $1.66 (non-GAAP), up 156% and 246% year-over-year, respectively.

• Significant momentum expected in the second half of 2026, led by accelerating demand for EPYC processors and Instinct GPUs, and major GPU supply agreements with OpenAI, Meta, Anthropic, and Microsoft.

• Sixth consecutive quarter of over 30% year-over-year revenue growth, with strong design wins and expanding product portfolio.

Financial highlights

• Revenue: $11.5 billion, up 50% year-over-year and 13% sequentially; gross margin: 54% (GAAP), 56% (non-GAAP); operating income: $2.0 billion (GAAP), $3.1 billion (non-GAAP); net income: $2.3 billion; diluted EPS: $1.38 (GAAP), $1.66 (non-GAAP).

• Data Center segment revenue: $6.7 billion, up 107% year-over-year; Client and Gaming: $3.8 billion, up 6% year-over-year (Client up 23%, Gaming down 31%); Embedded: $977 million, up 19% year-over-year.

• Free cash flow: $1.56 billion; cash, equivalents, and short-term investments: $13.1 billion.

• GAAP net income: $2.3 billion, up 163% year-over-year; adjusted EBITDA: $3.32 billion.

• Operating expenses: $3.4 billion, up 40% year-over-year; R&D expenses: $2.5 billion (+33% YoY); MG&A: $1.4 billion (+41% YoY).

Outlook and guidance

• Q3 2026 revenue expected at approximately $13 billion ±$300 million, up 41% year-over-year and 13% sequentially; non-GAAP gross margin projected at 56%; operating expenses at $3.65 billion; effective tax rate at 13%.

• Data Center and Embedded segments to drive double-digit growth; Gaming segment to decline.

• Data Center segment revenue expected to more than double year-over-year in 2027; server revenue to grow over 80% in H2 2026 and over 70% for full year 2027.

• Revenue growth projected to substantially exceed prior target of 35%, with EPS expected to significantly surpass $20 within the strategic timeframe.

• Ongoing investments in AI and data center capacity, with new long-term lease and investment commitments.