AMD’s Q2 2025 Earnings: Record Revenue & Optimism

Advanced Micro Devices, Inc. ((AMD)) has held its Q2 earnings call. Read on for the main highlights of the call.

AMD’s Q2 2025 Earnings Call: Record Revenue and Optimistic Outlook

Advanced Micro Devices, Inc. (AMD) recently held its Q2 2025 earnings call, revealing a strong financial performance marked by record revenue and significant growth in key segments. Despite challenges such as U.S. export controls affecting China sales and a decline in gross margin due to an inventory write-down, the company expressed optimism about future growth, particularly in AI and data center opportunities.

Record Revenue Achieved

AMD reported a record revenue of $7.7 billion for Q2 2025, marking a 32% year-over-year increase. This impressive growth was driven by strong sales of Ryzen and EPYC processors, along with higher semi-custom shipments, showcasing the company’s robust market position.

Strong Data Center Segment Performance

The Data Center segment saw a 14% year-over-year revenue increase, reaching $3.2 billion. This growth was fueled by robust demand for EPYC processors, marking AMD’s 33rd consecutive quarter of year-over-year share gains in cloud and enterprise CPU sales.

Client and Gaming Segment Growth

AMD’s Client and Gaming segment experienced a remarkable 69% year-over-year growth, totaling $3.6 billion. This surge was driven by record client CPU sales and strong demand for gaming products, with client revenue alone increasing 67% year-over-year to $2.5 billion.

Successful Launch of New Products

The company successfully launched the Instinct MI350 series accelerators and Zen 5 desktop portfolio, demonstrating leadership in AI and gaming performance. Notably, the MI350 series began volume production ahead of schedule in June, underscoring AMD’s commitment to innovation.

Positive Free Cash Flow

AMD delivered over $1 billion in free cash flow during the quarter, highlighting its strong financial health and operational efficiency. This positive cash flow is a testament to the company’s effective management and strategic growth initiatives.

Impact of U.S. Export Controls

U.S. export restrictions on MI308 sales to China resulted in an $800 million inventory write-down and affected Data Center revenue, causing a 12% sequential decrease. This challenge underscores the geopolitical factors impacting AMD’s operations.

Gross Margin Decline

AMD’s gross margin declined by 10 points to 43% from 53% a year ago, primarily due to the inventory write-down. Excluding this charge, the non-GAAP gross margin would have been approximately 54%, reflecting the company’s underlying profitability.

Embedded Segment Revenue Decline

The Embedded segment experienced a 4% year-over-year revenue decline to $824 million, indicating mixed demand in embedded end markets. This segment’s performance highlights the variability in demand across different market segments.

Forward-Looking Guidance

During the earnings call, AMD provided an optimistic outlook for the remainder of the year, projecting third-quarter revenue of approximately $8.7 billion, reflecting a 28% year-over-year growth. This growth is expected to be driven by double-digit increases across the Client, Gaming, and Data Center segments, with the MI350 series accelerators anticipated to contribute significantly. Despite export restrictions impacting MI308 sales to China, AMD remains confident in its future growth, supported by strong customer interest and the anticipated launch of the MI400 series in 2026.

In conclusion, AMD’s Q2 2025 earnings call highlighted a strong financial performance with record revenue and significant growth in key segments. Despite challenges such as export controls and a decline in gross margin, the company remains optimistic about its future, driven by innovation and strong demand in AI and data center markets. Investors and market enthusiasts will be keenly watching AMD’s progress as it navigates these challenges and opportunities.