AMD (AMD) Q2 2026 earnings summary

Executive summary

• Achieved record quarterly revenue of $11.5 billion, up 50% year-over-year and 13% sequentially, driven by strong adoption of EPYC, Instinct, Ryzen, and embedded processors, with Data Center revenue more than doubling and now representing 58% of total revenue.

• Diluted EPS increased 82% year-over-year, reaching $1.38 (GAAP) and $1.66 (non-GAAP), with net income at $2.3 billion (GAAP) and $2.8 billion (non-GAAP).

• Embedded segment returned to strong growth, and client segment saw continued share gains despite a softer PC market.

• Significant momentum expected in the second half of 2026, led by accelerating demand for EPYC processors and Instinct GPUs.

Financial highlights

• Gross margin expanded to 56% (non-GAAP) and 54% (GAAP), up over 200 basis points year-over-year, driven by favorable product mix and data center growth.

• Operating income reached $3.1 billion (non-GAAP, 27% margin) and $1.99 billion (GAAP, 17% margin); operating expenses were $3.4 billion, up 40% year-over-year due to increased R&D investment.

• Net income was $2.3 billion (GAAP), up 163% year-over-year; free cash flow was $1.56 billion, with cash and equivalents at $13.1 billion.

Outlook and guidance

• Q3 2026 revenue expected at ~$13 billion ±$300 million, up 41% year-over-year and 13% sequentially, led by strong double-digit growth in Data Center and Embedded segments.

• Non-GAAP gross margin projected at 56%, operating expenses at $3.65 billion, and effective tax rate at 13%.

• 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 now expected to substantially exceed prior >35% target, with EPS to significantly surpass $20 within the strategic timeframe.