Analysis of the Form 10-K | Fiscal year ended December 27, 2025
FY2025, ended 12/27/2025, a 52-week year. The comparative fiscal years are FY2024, ended 12/28/2024, and FY2023, ended 12/30/2023. Reporting currency: U.S. dollars; unless stated otherwise, amounts are in millions of U.S. dollars (US$ mn). The document was signed by management and by the auditor on February 3, 2026.
Market data, external to the document: closing price of US$214.99 on 12/27/2025. Shares outstanding: 1,630,410,843 on 01/30/2026, from the 10-K cover page. Fiscal year-end market capitalization = 214.99 × 1,630,410,843 = US$350.52 billion (350,522 mn).
AMD designs semiconductors and owns no wafer fabs. The document states that it uses third-party foundries for the wafers of "all of our products", with TSMC producing all CPU and GPU wafers at 7 nm or smaller. It also states that "Nearly all product assembly and final testing" takes place at third-party operated facilities in China, Malaysia and Taiwan.
AMD sells AI accelerators, CPUs, GPUs, FPGAs, semi-custom SoCs and network cards to hyperscalers, OEMs, ODMs, distributors and console makers. According to the document, "Substantially all of the Company's revenue is derived from product sales". Standard products generate revenue on shipment, with typical payment terms of "net 30 to 60 days". Custom products and development services are recognized over time: 9% of revenue in FY2025, 8% in FY2024, 25% in FY2023.
From the first quarter of FY2025 the Client and Gaming segments were combined into a single segment, with prior periods recast. There are three segments: Data Center (Instinct AI accelerators, EPYC CPUs, DPUs, AI NICs, data center FPGAs), Client and Gaming (Ryzen CPUs, Radeon GPUs, semi-custom console SoCs) and Embedded (CPUs, FPGAs and adaptive SoCs for industrial, automotive, defense and communications markets). The "All Other" category, which is not a segment, collects unallocated costs.
Revenue by segment (US$ mn)
| Segment | FY2025 | % | FY2024 | % | FY2023 | % | Chg. 25/24 | Chg. 24/23 |
|---|---|---|---|---|---|---|---|---|
| Data Center | 16,635 | 48.0% | 12,579 | 48.8% | 6,496 | 28.6% | +32.2% | +93.6% |
| Client | 10,640 | 30.7% | 7,054 | 27.4% | 4,651 | 20.5% | +50.8% | +51.7% |
| Gaming | 3,910 | 11.3% | 2,595 | 10.1% | 6,212 | 27.4% | +50.7% | −58.2% |
| Total Client and Gaming | 14,550 | 42.0% | 9,649 | 37.4% | 10,863 | 47.9% | +50.8% | −11.2% |
| Embedded | 3,454 | 10.0% | 3,557 | 13.8% | 5,321 | 23.5% | −2.9% | −33.2% |
| Total | 34,639 | 100.0% | 25,785 | 100.0% | 22,680 | 100.0% | +34.3% | +13.7% |
Source: Note 4, Segment Reporting. Total = Data Center + Total Client and Gaming + Embedded.
Revenue by geographic region, based on the customer's billing location (US$ mn)
| Region | FY2025 | % | FY2024 | % | FY2023 | % | Chg. 25/24 | Chg. 24/23 |
|---|---|---|---|---|---|---|---|---|
| United States | 11,363 | 32.8% | 8,693 | 33.7% | 7,837 | 34.6% | +30.7% | +10.9% |
| China (incl. Hong Kong) | 7,751 | 22.4% | 6,231 | 24.2% | 3,417 | 15.1% | +24.4% | +82.4% |
| Taiwan | 5,186 | 15.0% | 3,301 | 12.8% | 1,841 | 8.1% | +57.1% | +79.3% |
| Singapore | 4,284 | 12.4% | 3,614 | 14.0% | 2,231 | 9.8% | +18.5% | +62.0% |
| Other regions | 6,055 | 17.5% | 3,946 | 15.3% | 7,354 | 32.4% | +53.4% | −46.3% |
| Total | 34,639 | 100.0% | 25,785 | 100.0% | 22,680 | 100.0% | +34.3% | +13.7% |
Source: Note 4. FY2025 percentages rounded to one decimal add up to 100.1% because of rounding; to two decimals they add up to 100.00%. Billing location does not coincide with the end market, which the document does not disclose.
No customer exceeded 10% of consolidated revenue in FY2025 or FY2024. In FY2023 one Client and Gaming segment customer accounted for 18%. Employees at 12/27/2025: approximately 31,000; the document does not provide the FY2024 figure.
Signatories: Lisa T. Su (President and CEO, described as "Chair" in the attached certifications), Jean Hu (EVP, CFO and Treasurer) and Emily Ellis (Corporate Vice President, Chief Accounting Officer). The exhibits include an "Offer Letter dated November 12, 2025, by and between Advanced Micro Devices, Inc. and Emily Ellis". The Chief Accounting Officer therefore has an offer letter dated within the fiscal year. The document does not say who held the role before.
Items that are new compared with the comparative years:
Excluding amortization of acquisition-related intangibles, the FY2025 gross margin was 52.5%: (34,639 − 16,456) / 34,639 = 52.5%. The document reports approximately 7,200 U.S. patents and approximately 12,600 issued patents worldwide.
ROIC calculated excluding goodwill and acquisition-related intangibles is 34.0% in FY2025. On total invested capital the same metric falls to 5.2%. The gap comes from the 41,831 mn of goodwill and acquisition-related intangibles on the balance sheet. The formulas are shown under Key metrics.
The Embedded segment has the highest segment operating margin in the group in all three years: 36.0% in FY2025 (1,243 / 3,454). In semi-custom the document states: "We are the market share leader in semi-custom game console products".
The limits of the advantage are written in the document itself. In Data Center the main competitors named are Intel and Nvidia, and of the latter the document says that it "leverages its market position in data center GPU, financial resources, and proprietary software ecosystem". The document adds that some customers "are internally developing their own data center microprocessor products and accelerator products". The Data Center operating margin fell from 27.7% in FY2024 to 21.7% in FY2025, with revenue up 32.2%.
The only explicit price data concerns Client: revenue up 51%, driven by "a 31% increase in unit shipments of processors and a 15% increase in average selling price of processors". The share of growth explained by volume is obtained in logarithms: ln(1.31) / ln(1.31 × 1.15) = 0.270 / 0.410 = 65.9%. The remaining 34.1% is explained by average selling price.
At group level, gross margin excluding intangibles amortization moved from 53.0% to 52.5%. The net MI308 charge of approximately 440 mn is worth 1.3 margin points: 440 / 34,639 = 1.3%. Excluding it, the margin would have been 53.8%: (34,639 − 16,456 + 440) / 34,639 = 53.8%. The improvement net of the charge is therefore 0.7 points (53.76% − 53.02%), which the document attributes to product mix.
Other signals point the opposite way. Marketing and advertising expenses are reported at approximately 2.4 billion, against approximately 1.2 billion in FY2024. Accrued marketing programs with customers rose from 1,063 to 1,454 mn: 1,454 / 1,063 − 1 = +36.8%, above revenue growth. The document also reports that Intel "uses its microprocessor market position to price its products aggressively" and that these practices "have reduced and may reduce our unit sales and average selling prices". Commercial incentives are growing at group level, but the document does not break them down by segment. For Data Center and Embedded it provides no average selling prices.
According to the document, FY2025 growth is predominantly organic. The results of the ZT Design Business, included in Data Center, are described as "not material". The other acquisitions of the year have a total consideration of 90 mn and results that are "not material". The ZT Manufacturing Business, which represented "the majority of ZT Systems' operations", is in discontinued operations and is excluded from revenue.
The document does not quantify the dollar contribution of acquisitions to revenue, nor the revenue of individual Data Center product lines (EPYC CPUs versus Instinct GPUs). AI growth therefore cannot be separated from server CPU growth.
The three-year series shows a significant change in mix. Gaming fell from 6,212 mn in FY2023 to 2,595 mn in FY2024, then recovered to 3,910 mn. Embedded went from 5,321 to 3,454 mn over two years: 3,454 / 5,321 − 1 = −35.1%.
| Item (US$ mn) | FY2025 | FY2024 | Chg. % |
|---|---|---|---|
| Revenue | 34,639 | 25,785 | +34.3% |
| Cost of sales (excl. intangibles amortization) | 16,456 | 12,114 | +35.8% |
| Research and development | 8,091 | 6,456 | +25.3% |
| Marketing, general and administrative | 4,144 | 2,735 | +51.5% |
| Amortization of acquisition-related intangibles (total) | 2,254 | 2,394 | −5.8% |
| Stock-based compensation (SBC) | 1,638 | 1,407 | +16.4% |
| Operating income | 3,694 | 1,900 | +94.4% |
Operating leverage comes from two lines. The first is R&D, which grew more slowly than revenue: from 25.0% to 23.4% of revenue. The second is intangibles amortization, which fell in absolute terms. Cost of sales grew faster than revenue. Marketing, general and administrative expenses grew at 1.50 times the pace of revenue: 51.5 / 34.3 = 1.50.
Operating income before intangibles amortization grew 38.5%: (3,694 + 2,254) / (1,900 + 2,394) − 1 = 5,948 / 4,294 − 1 = 38.5%. The reported +94.4% starts from an FY2024 operating margin of 7.4%.
| US$ mn | FY2025 | FY2024 | FY2023 | Chg. 25/24 | Chg. 24/23 |
|---|---|---|---|---|---|
| Net revenue | 34,639 | 25,785 | 22,680 | +34.3% | +13.7% |
| Cost of sales | 16,456 | 12,114 | 11,278 | +35.8% | +7.4% |
| Intangibles amortization (in cost of sales) | 1,031 | 946 | 942 | +9.0% | +0.4% |
| Total cost of sales | 17,487 | 13,060 | 12,220 | +33.9% | +6.9% |
| Gross profit | 17,152 | 12,725 | 10,460 | +34.8% | +21.7% |
| Research and development | 8,091 | 6,456 | 5,872 | +25.3% | +9.9% |
| Marketing, general and administrative | 4,144 | 2,735 | 2,318 | +51.5% | +18.0% |
| Intangibles amortization (in operating expenses) | 1,223 | 1,448 | 1,869 | −15.5% | −22.5% |
| Restructuring charges | — | 186 | — | n.m. | n.m. |
| Total operating expenses | 13,458 | 10,825 | 10,059 | +24.3% | +7.6% |
| Operating income | 3,694 | 1,900 | 401 | +94.4% | +373.8% |
| Interest expense | (131) | (92) | (106) | +42.4% | −13.2% |
| Other income (expense), net | 577 | 181 | 197 | +218.8% | −8.1% |
| Income before income taxes and equity income | 4,140 | 1,989 | 492 | +108.1% | +304.3% |
| Income tax provision (benefit) | (103) | 381 | (346) | n.m. | n.m. |
| Equity income in investee | 26 | 33 | 16 | −21.2% | +106.3% |
| Income from continuing operations | 4,269 | 1,641 | 854 | +160.1% | +92.2% |
| Income from discontinued operations | 66 | — | — | n.m. | n.m. |
| Net income | 4,335 | 1,641 | 854 | +164.2% | +92.2% |
| Basic EPS (US$) | 2.67 | 1.01 | 0.53 | +164.4% | +90.6% |
| Diluted EPS (US$) | 2.65 | 1.00 | 0.53 | +165.0% | +88.7% |
| Basic weighted-average shares (mn) | 1,624 | 1,620 | 1,614 | +0.2% | +0.4% |
| Diluted weighted-average shares (mn) | 1,636 | 1,637 | 1,625 | −0.1% | +0.7% |
Source: Consolidated Statements of Operations; Note 13. Taxes are shown with the document's sign convention: a negative value is a benefit.
FY2025 net income includes two positive non-recurring items. The first is the release of uncertain tax positions of 853 mn, which brings the effective tax rate to −2.5%. The second is net gains on long-term investments of 366 mn, recorded in other income according to Note 18. The cash flow statement reports 341 mn for the same item, and the document does not reconcile the 25 mn difference.
| Normalization of FY2025 income from continuing operations (US$ mn) | Taxes at 21% only | Taxes at 21% and investment gains excluded |
|---|---|---|
| Income before income taxes | 4,140 | 4,140 |
| Less gains on long-term investments | — | (366) |
| Taxable base | 4,140 | 3,774 |
| Notional taxes at 21% | (869.4) | (792.5) |
| Equity income in investee | 26 | 26 |
| Normalized income | 3,296.6 | 3,007.5 |
Check: 4,140 − 869.4 + 26 = 3,296.6; 4,140 − 366 − 792.5 + 26 = 3,007.5.
| Liquidity (US$ mn) | 12/27/2025 | 12/28/2024 |
|---|---|---|
| Cash and cash equivalents | 5,539 | 3,787 |
| Short-term investments | 5,013 | 1,345 |
| Cash and marketable securities | 10,552 | 5,132 |
| Gross debt, line by line (US$ mn) | 12/27/2025 | 12/28/2024 |
|---|---|---|
| 4.212% Senior Notes due 2026 | 875 | — |
| 4.319% Senior Notes due 2028 | 625 | — |
| 2.375% Senior Notes due 2030 (Assumed Xilinx Notes, guaranteed by AMD) | 750 | 750 |
| 3.924% Senior Notes due 2032 | 500 | 500 |
| 4.393% Senior Notes due 2052 | 500 | 500 |
| Total principal amount | 3,250 | 1,750 |
| Unamortized debt discount and issuance costs | (28) | (29) |
| Financial debt, carrying amount (874 current + 2,348 long-term) | 3,222 | 1,721 |
| Operating lease liabilities, current portion | 159 | not available |
| Operating lease liabilities, long-term portion | 625 | 491 |
| Gross debt including leases | 4,006 | not calculable |
Source: Note 9 and Note 10; Balance Sheets. Sum: 875 + 625 + 750 + 500 + 500 = 3,250; 3,250 − 28 = 3,222; 3,222 + 159 + 625 = 4,006. The document describes finance leases as "immaterial" and does not disclose the amount. Nor does it disclose the current portion of leases at 12/28/2024, so FY2024 gross debt including leases cannot be calculated.
Net financial position at 12/27/2025, including leases = 10,552 − 4,006 = 6,546 mn of net cash. Excluding leases = 10,552 − 3,222 = 7,330 mn. At 12/28/2024, excluding leases = 5,132 − 1,721 = 3,411 mn.
Stockholders' equity is 62,999 mn at 12/27/2025, against 57,568 mn at 12/28/2024: 62,999 / 57,568 − 1 = +9.4%. At 12/30/2023 it was 55,892 mn. Non-controlling interests: none; the financial statements consolidate "wholly-owned subsidiaries" and show no such line.
Goodwill and acquisition-related intangibles total 41,831 mn: 25,126 + 16,705 = 41,831. They account for 54.4% of total assets: 41,831 / 76,926 = 54.4%. Tangible equity is 21,168 mn: 62,999 − 41,831 = 21,168.
The notes also report obligations that are not balance sheet liabilities. Non-cancellable purchase commitments are 12,166 mn, of which 8,498 fall in FY2026: 8,498 / 12,166 = 69.9%. Data center and other real estate leases not yet commenced are worth 1.3 billion. After year-end, the guarantee on a partner's leases of up to 4.1 billion is added.
Inventories rose to 7,920 mn from 5,734: 7,920 / 5,734 − 1 = +38.1%, faster than revenue.
| US$ mn | FY2025 | FY2024 | FY2023 |
|---|---|---|---|
| Operating cash flow, continuing operations | 6,493 | 3,041 | 1,667 |
| Operating cash flow, discontinued operations | 1,216 | — | — |
| Capex, continuing operations | (974) | (636) | (546) |
| FCF, continuing operations (operating cash flow − capex) | 5,519 | 2,405 | 1,121 |
| Stock-based compensation (SBC) | 1,638 | 1,407 | 1,384 |
| FCF net of SBC | 3,881 | 998 | (263) |
| Share repurchases (program) | (1,316) | (862) | (985) |
| Repurchases for tax withholding on equity plans | (607) | (728) | (427) |
| Dividends paid | 0 | 0 | 0 |
| Income taxes paid in cash, net of refunds | 884 | 1,386 | 523 |
Source: Consolidated Statements of Cash Flows and supplemental disclosures. FCF: 6,493 − 974 = 5,519; 3,041 − 636 = 2,405; 1,667 − 546 = 1,121. FCF net of SBC: 5,519 − 1,638 = 3,881; 2,405 − 1,407 = 998; 1,121 − 1,384 = −263.
FY2025 FCF excludes operating cash flow from discontinued operations (1,216) and the related capex (38). Including them, FCF would be 7,709 − 974 − 38 = 6,697 mn.
The 103 mn book tax benefit does not correspond to a cash receipt: in FY2025 cash taxes paid were 884 mn. Operating cash flow also absorbs an increase in inventories of 2,189 mn.
FY2025 owner earnings = income from continuing operations + depreciation and amortization (cash flow statement) + amortization of acquisition-related intangibles − capex = 4,269 + 750 + 2,254 − 974 = 6,299 mn. SBC is neither added nor subtracted, because GAAP net income is already net of that cost. Treating amortization of acquisition-related intangibles as an economic cost, owner earnings fall to 4,269 + 750 − 974 = 4,045 mn.
Shares outstanding went from 1,622 to 1,630 mn in FY2025: 1,630 / 1,622 − 1 = +0.5%. In the same year AMD spent 1,923 mn on repurchases and tax withholding: 1,316 + 607 = 1,923. The increase reflects 9 mn shares issued for ZT Systems and 15 mn issued under equity plans.
| Weight of SBC, FY2025 | Formula | Result |
|---|---|---|
| SBC / revenue | 1,638 / 34,639 | 4.7% |
| SBC / operating income | 1,638 / 3,694 | 44.3% |
| SBC / FCF from continuing operations | 1,638 / 5,519 | 29.7% |
| Unrecognized future SBC cost (US$ mn) | 3,500 RSUs + 232 PRSUs + 51 options + 52 ESPP | 3,835 |
| OpenAI warrant / shares at 01/30/2026 | 160 / 1,630.4 | 9.8% |
The OpenAI warrant has an exercise price of US$0.01 per share.
| Metric | FY2025 | FY2024 | FY2023 |
|---|---|---|---|
| Gross margin (GAAP) | 49.5% | 49.4% | 46.1% |
| Gross margin excl. intangibles amortization | 52.5% | 53.0% | 50.3% |
| Operating margin | 10.7% | 7.4% | 1.8% |
| Net margin | 12.5% | 6.4% | 3.8% |
| EBITDA (US$ mn) | 6,698 | 4,965 | 3,854 |
| FCF, continuing operations (US$ mn) | 5,519 | 2,405 | 1,121 |
| FCF conversion / income from continuing operations | 129.3% | 146.6% | 131.3% |
| SBC / revenue | 4.7% | 5.5% | 6.1% |
| R&D / revenue | 23.4% | 25.0% | 25.9% |
EBITDA = operating income + "Depreciation and amortization" from the cash flow statement + amortization of acquisition-related intangibles from the income statement.
The cash flow statement reports FY2024 intangibles amortization of 2,393; the 1 mn difference is rounding. No item is double-counted, because the cash flow statement shows acquisition-related intangibles on a separate line from the 750 mn.
ROIC. NOPAT is calculated at the 21% statutory rate, because the effective rate is distorted by the tax release. Invested capital = stockholders' equity + financial debt − cash and marketable securities, using year-end balances for both years. Averages are not used, because the opening FY2024 balance of short-term investments is not in the document.
Leverage.
Interest coverage.
FCF conversion / income from continuing operations.
In FY2025, conversion above 100% comes from non-cash items, which the document quantifies at approximately 4.6 billion. The largest are intangibles amortization (2,254) and SBC (1,638). Working capital partly offsets them, absorbing approximately 2.4 billion.
Multiples. Closing price on 12/27/2025: US$214.99. Shares on 01/30/2026: 1,630,410,843. Market capitalization: 350,522 mn.
| Multiple | Formula | Result |
|---|---|---|
| P/E | 350,522 / 4,335 | 80.9x |
| Price / diluted EPS | 214.99 / 2.65 | 81.1x |
| P/E on income from continuing operations | 350,522 / 4,269 | 82.1x |
| P/E on normalized income (taxes at 21% only) | 350,522 / 3,296.6 | 106.3x |
| P/E on normalized income (taxes and investment gains) | 350,522 / 3,007.5 | 116.5x |
| P/S | 350,522 / 34,639 | 10.1x |
| P/FCF | 350,522 / 5,519 | 63.5x |
| FCF yield | 5,519 / 350,522 | 1.57% |
| FCF yield net of SBC | 3,881 / 350,522 | 1.11% |
| Owner earnings yield | 6,299 / 350,522 | 1.80% |
| Enterprise value (US$ mn) | 350,522 + 3,222 + 784 − 10,552 | 343,976 |
| EV/EBITDA | 343,976 / 6,698 | 51.4x |
| P/BV | 350,522 / 62,999 | 5.6x |
| P/tangible BV | 350,522 / 21,168 | 16.6x |
The price and the share count have different dates. The balance sheet also shows 1,630 mn shares outstanding at 12/27/2025, so the gap does not change the multiples at the first decimal.
Export controls on China (materialized and potential). In FY2025 the new license requirement for MI308 products generated "approximately $800 million in inventory and related charges". After the first licenses were granted, approximately 360 mn was reversed, for a net charge of approximately 440 mn. China (including Hong Kong) accounts for 7,751 mn, 22.4% of revenue by billing location. The document also reports that U.S. government officials expressed "an expectation that the U.S. government will receive 15% of the revenue generated from licensed MI308 sales to China", with no published regulation. It matters because new restrictions would hit revenue, inventory and margins at the same time.
Dependence on a single manufacturer and on Taiwan (potential). AMD relies on TSMC "for the production of all wafers for microprocessor and GPU products at 7 nanometer (nm) or smaller nodes". The document explicitly cites the risk of "geopolitical changes between China and Taiwan". It matters because the document names no alternative supplier for the most advanced products.
Goodwill concentrated in a shrinking segment (potential). Embedded carries 21,072 mn of goodwill, 83.9% of the total: 21,072 / 25,126 = 83.9%. In the same segment revenue fell 35.1% over two years. Segment operating income went from 2,628 to 1,243 mn. Goodwill is 17.0 times FY2025 segment operating income: 21,072 / 1,243 = 17.0. In FY2025 and FY2024 the annual test was qualitative ("annual qualitative impairment tests"). An impairment would not affect cash, but would reduce equity, and goodwill and intangibles make up 54.4% of total assets.
Inventories and purchase commitments (potential, with a precedent in FY2025). Inventories grew 38.1% to 7,920 mn. Raw materials went from 351 to 909 mn. Finished goods went from 1,094 to 2,243 mn. On year-end balances and cost of sales excluding amortization, days of inventory are 176: 7,920 / 16,456 × 365 = 175.7. Inventory valuation is the auditor's only Critical Audit Matter. Non-cancellable commitments (12,166 mn) exceed cash and marketable securities (10,552 mn).
Competition and customer vertical integration (potential). The document names Intel and Nvidia as the main Data Center competitors. It cites their partnership announced in September 2025 as a possible source of "increased competition and pricing pressure". It also states that some customers are developing CPUs and accelerators in-house. The Data Center margin fell from 27.7% to 21.7%; excluding the MI308 charge it would have been 24.3%: (3,603 + 440) / 16,635 = 24.3%.
Customer concentration and counterparty risk (potential). The document states that it depends on "a small number of customers for a substantial portion of our business". A single customer accounts for approximately 11% of accounts receivable. The document warns that AI customers may request "alternative financing or deferred‑payment arrangements". After year-end, AMD guaranteed up to 4.1 billion of a commercial partner's leases, an exposure that declines with payments over 15 years. It matters because the credit risk of commercial counterparties moves onto AMD's balance sheet.
Dilution linked to commercial contracts (potential). The OpenAI warrant covers up to 160 million shares, at US$0.01 each. Against shares outstanding at 01/30/2026 it represents 9.8%. It vests on GPU purchase milestones and on "specified AMD stock price targets". The document states that it will be accounted for as a liability until the conditions for equity classification are met.
Open tax positions (potential). Remaining uncertain tax positions amount to 806 mn, recorded within long-term liabilities. In the United States tax years "from 2007" remain open to examination, and pre-acquisition Xilinx returns for 2018-2019 are under IRS audit. The FY2025 benefit of 853 mn derives from a specific ruling, the "reasonable cause relief" approved by the IRS in April 2025.
Litigation: the document states "there were no material legal proceedings" at 12/27/2025. The environmental liability for three Superfund sites is estimated at approximately 5.9 mn.
AMD is incorporated in Delaware and listed on NASDAQ under the symbol "AMD". Common shares have a par value of US$0.01, with 4,000 mn shares authorized. The charter also authorizes 1,000,000 shares of serial preferred stock, unissued and undesignated. The document reports 5,094 registered holders at 01/30/2026. It describes no controlling shareholder and no differentiated voting rights. Ownership structure, director independence, executive compensation and related-party transactions are incorporated by reference from the 2026 proxy statement, which is not part of the document: these data are not available.
Board, as shown by the signatures: Lisa T. Su (Chair, President and CEO), Nora M. Denzel (Lead Independent Director), Mike P. Gregoire, Joe A. Householder, John W. Marren, KC McClure, Jon A. Olson, Abhi Y. Talwalkar and Beth W. Vanderslice. Of the nine directors signing, Lisa T. Su is the only one who also signs with an executive title, and she combines the roles of chair and chief executive.
In the last quarter Mark Papermaster (EVP, Chief Technology Officer) adopted a Rule 10b5-1 trading plan. The plan covers up to 124,936 shares and terminates on November 16, 2026.
Related parties: AMD holds 15% of two joint ventures with affiliates of Tongfu Microelectronics that provide assembly and test services. Purchases from these JVs were 2.0 billion in FY2025 and 1.7 billion in FY2024. Payables to the JVs were 408 mn at year-end. In FY2024 AMD granted one of the JVs a 100 mn loan, maturing on 10/16/2026.
Auditor: Ernst & Young LLP, which states "We have served as the Company's auditor since 1970". The opinions on the financial statements and on internal control are unqualified, dated February 3, 2026.
Changes during the year. The document reports three changes:
The cover page indicates no correction of prior-period errors. ASU 2024-03 on expense disaggregation will apply from FY2027.
Critical Audit Matter: one only, inventory valuation (net balance 7,920 mn). The auditor explains it with assumptions on future demand that are "sensitive to the competitiveness of product offerings, customer requirements, and product life cycles".
Accounting choices that move earnings.
GAAP and non-GAAP. The 10-K does not present non-GAAP measures. However, the performance measure used by the CODM, segment operating income, excludes the "All Other" category, worth 4,007 mn. The excluded items are:
| Item excluded from segments (US$ mn) | FY2025 | FY2024 | FY2023 |
|---|---|---|---|
| Amortization of acquisition-related intangibles | 2,254 | 2,394 | 2,811 |
| Stock-based compensation | 1,638 | 1,407 | 1,384 |
| Acquisition-related and other costs | 228 | 186 | 258 |
| Restructuring charges | — | 186 | — |
| Inventory loss at (recovery from) contract manufacturer | (67) | 65 | — |
| Licensing gain | (67) | (48) | (34) |
| Other expense | 21 | — | — |
| Total All Other | 4,007 | 4,190 | 4,419 |
Sums: FY2025: 2,254 + 1,638 + 228 − 67 − 67 + 21 = 4,007; FY2024: 2,394 + 1,407 + 186 + 186 + 65 − 48 = 4,190; FY2023: 2,811 + 1,384 + 258 − 34 = 4,419.
Check: segment operating income 3,603 + 2,855 + 1,243 = 7,701; 7,701 − 4,007 = 3,694, equal to consolidated operating income. The excluded items equal 108.5% of GAAP operating income: 4,007 / 3,694 = 108.5%. The SBC excluded is a recurring cost paid in shares.
Taxes. The effective tax rate is −2.5% against the 21% U.S. federal statutory rate: −103 / 4,166 = −2.5%. The 4,166 denominator is income before taxes including equity income, as used in the reconciliation. The main reconciling items are:
Without the change in uncertain positions the rate would have been 16.6%: (−103 + 793) / 4,166 = 16.6%. Cash taxes paid were 884 mn: 884 / 4,166 = 21.2% of pre-tax income. The document does not separate taxes paid for discontinued operations.
Agreement with OpenAI. The document describes "a product purchase agreement with OpenAI OpCo, LLC, (OpenAI) to deploy 6 gigawatts of AMD GPUs", with the first gigawatt based on MI450. The document does not quantify expected revenue or the delivery schedule beyond the first gigawatt. The warrant over up to 160 million shares is linked to the contract.
Rack-scale offering. AMD previewed the "Helios" platform, which integrates CPUs, GPUs and networking, and retained the ZT Design Business for systems design. Sanmina becomes "our preferred partner for manufacturing capabilities in building complex AI solutions", under a five-year manufacturing agreement.
Resumption of licensed MI308 sales in China. Shipments began in the fourth quarter and approximately 360 mn of charges were reversed. Further sales depend on "customer demand, China's import control rules and our ability to obtain licenses". They also depend on the possible 15% levy on revenue from licensed sales.
Sanmina earn-out. AMD may receive up to 450 mn of additional consideration through 2028. It has already recorded 332 mn as a receivable, subject to impairment assessment at each reporting date.
Capacity commitments for FY2026. Purchase commitments for FY2026 amount to 8,498 mn. Data center and other real estate leases commencing in 2026 are worth 1.3 billion. The document presents them as contractual obligations and does not link them to sales forecasts.
The 10-K does not report the margin targets, guidance or business plan targets set in the previous year, and the prior-year document is not available. A comparison between stated and achieved is therefore not possible. The table is limited to programs started before or during FY2025, as described in this document, and their status at year-end.
| Program (as described in the document) | Initial terms | Status at 12/27/2025 | Variance |
|---|---|---|---|
| 2024 restructuring plan | Reduction of approximately 4% of headcount, charges of 186 mn | "substantially completed in the first quarter of fiscal year 2025"; no additional charges in FY2025; remaining liability from 89 to 10 mn | No charges beyond the 186 mn |
| ZT Systems acquisition and manufacturing divestiture | Consideration of 4,409 mn, including 361 mn of contingent consideration | Sale to Sanmina closed on 10/27/2025 for 2.4 billion in cash plus shares; 1.4 billion received net of cash divested and adjustments | Contingent consideration settled at 482 mn: 482 − 361 = +121 mn, +33.5% |
| Share repurchase program | New 6 billion authorization in May 2025, 14 billion in total | 1.3 billion used in FY2025, no repurchases in the fourth quarter, 9.4 billion remaining | No stated spending target: not measurable |
| Acquired in-process R&D (IPR&D) | 162 mn not amortized at 12/28/2024 | Completed and amortized from April 2025 over 5 years | None |
| Commercial paper | Program of up to 3.0 billion | 950 mn issued in the first quarter and repaid in the second | No balance at year-end |
| AI accelerator roadmap | "annual cadence of leadership for AMD Instinct solutions, beginning with the AMD Instinct MI350 Series GPUs in 2025" | MI350 shipping in FY2025 according to the document | Volumes and timing against plan not verifiable |
The closing price is US$214.99 on 12/27/2025, and shares outstanding are 1,630,410,843 on 01/30/2026. At this capitalization the stock trades at 80.9 times net income. On income normalized for taxes and investment gains the multiple rises to 116.5 times. The FCF yield is 1.57%, and falls to 1.11% net of SBC. The price embeds prolonged growth in cash flows, not FY2025 cash flows.
A 5% FCF yield at the same capitalization would require FCF of 17,526 mn: 350,522 × 0.05 = 17,526. That is 3.18 times FY2025 FCF: 17,526 / 5,519 = 3.18. Over five years it equals compound FCF growth of 26.0% a year: 3.18^(1/5) − 1 = 26.0%. In FY2025, FCF from continuing operations grew 129.5% (5,519 / 2,405 − 1) from a low base. The document does not offer a long enough series to judge whether a 26% rate is sustainable over five years.
The thesis holds under three conditions that can be checked in the next filings. The first is that Data Center growth turns into segment margin, not just volume. The second is that the OpenAI contract generates revenue without the warrant exercise and the guarantees granted to partners absorbing its value for existing shareholders. The third is that SBC dilution is offset by repurchases without consuming most of the FCF. With a Data Center margin below 20% and inventories growing faster than revenue, the multiple paid would find no support in the document's numbers.
Metrics to monitor in the coming quarters:
Report based on the Form 10-K of Advanced Micro Devices, Inc. for fiscal year FY2025 ended December 27, 2025, signed on February 3, 2026. The multiples use the closing price of US$214.99 on 12/27/2025 and 1,630,410,843 shares on 01/30/2026, data provided externally to the document. This report is for analytical purposes only and does not constitute investment advice.
The full data table behind this report — every line item with its source in the filing and the arithmetic checks — is published separately: AMD FY2025 data table.