Advanced Micro Devices, Inc. Q2 FY2026 Earnings Call

· Earnings call transcript and AI-powered summary

Overall Financial Performance

  • Revenue: $11.5 billion, +50% year-over-year (vs. Q2 2025) and +13% sequentially. Record revenue driven by strong adoption of EPYC, Instinct, Ryzen, and embedded processors.
  • Gross Margin: 56%, up over 200 basis points YoY and 80 basis points sequentially, reflecting favorable product mix and growing data center contribution.
  • Operating Income: $3.1 billion (27% operating margin).
  • Diluted EPS: +82% year-over-year on a comparable basis (excluding Q2 2025's $800 million inventory charges related to MI308 export restrictions).
  • Cash Flow: $2.4 billion from operations; $1.6 billion free cash flow. Cash, equivalents, and short-term investments: $13.1 billion. Inventory: $8.5 billion (up sequentially to support data center demand).

Segment Performance

  • Data Center: Record $6.7 billion (+107% YoY, +16% sequentially), representing 58% of total revenue (up from 42% in Q2 2025). EPYC server CPU revenue grew >70% YoY for fifth consecutive record quarter (cloud and enterprise both >70% YoY). Instinct accelerator sales more than doubled YoY. Segment operating income: $2.1 billion (31% margin).

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Operator: Greetings, and welcome to the AMD Second Quarter 2026 Conference Call. [Operator Instructions] And please note that this conference is being recorded. I will now turn the conference over to Matt Ramsey, VP, Financial Strategy and IR. Thank you, Matt. You may begin. Matthew Ramsay: Thank you, and welcome to AMD's Second Quarter 2026 Financial Results Conference Call. By now, you should have had the opportunity to review a copy of our earnings press release and the accompanying slides. If you have not had the chance to review these materials, they can be found on the Investor Relations page of amd.com. Today, we will refer primarily to non-GAAP financial measures during the call. The full non-GAAP to GAAP reconciliations are available in today's press release and slides posted on our website. As a reminder, our second quarter 2025 results included approximately $800 million of inventory and related charges associated with U.S. export control restrictions on MI308 shipments to China. Unless otherwise noted, comments making year-over-year comparisons exclude the impact of those charges to provide a more comparable and meaningful view of our underlying business performance. Participants on today's conference call are Dr. Lisa Su, our Chair and CEO and Jean Hu, our Executive Vice President, CFO and Treasurer. This is a live call and will be replayed via webcast on our website. Before we begin, I would like to note that AMD will participate in the following events for the

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