Financial Analysis

Debt, Revolving Credit Facility and Commercial Paper Program Debt The Companys total debt as of December 27, 2025 and December 28, 2024 consisted of: December 27, 2025 December 28, 2024 (In millions) 4.212% Senior Notes Due 2026 (4.212% Notes) $ 875 $ 4.319% Senior Notes Due 2028 (4.319% Notes) 625 2.375% Senior Notes Due 2030 (2.375% Notes) 750 750 3.924% Senior Notes Due 2032 (3.924% Notes) 500 500 4.393% Senior Notes Due 2052 (4.393% Notes) 500 500 Total debt (principal amount) 3,250 1,750 Unamortized debt discount and issuance costs (28) (29) Total debt (net) 3,222 1,721 Less: current portion of long-term debt and related unamortized debt issuance costs (874) Total long-term debt $ 2,348 $ 1,721 4.212% Senior Notes Due 2026 and 4.319% Senior Notes Due 2028 On March 24, 2025, the Company issued 4.212% Notes and 4.319% Notes in aggregate principal amount of $1.5 billion, which are general unsecured senior obligations of the Company. The interest is payable semi-annually on March 24 and September 24 of each year, commencing on September 24, 2025. The Company may redeem some or all of the 4.212% Notes prior to September 24, 2026 and the 4.319% Notes prior to February 24, 2028 at a price equal to the greater of the present value of the principal amount and future interest through the maturity of the debt or 100% of the principal amount plus accrued and unpaid interest. On or after February 24, 2028, the Company may also redeem some or all of the 4.319% Notes at 100% of the pri …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

Goodwill and Acquisition-related Intangibles, net Goodwill In the first quarter of fiscal year 2025, the Company assigned goodwill to its updated reporting units to reflect the change in its segment reporting structure and determined no impairment immediately prior to and after the change. The following table summarizes Goodwill: Before segment change After segment change (in millions) Data Center Embedded Client Gaming Client and Gaming Total December 28, 2024 $ 3,403 $ 21,072 $ 126 $ 238 $ $ 24,839 Reassignment due to segment change (126) (238) 364 Acquisitions 287 287 December 27, 2025 $ 3,690 $ 21,072 $ $ $ 364 $ 25,126 During the fourth quarter of fiscal years 2025 and 2024, the Company conducted its annual qualitative impairment tests of goodwill and concluded that there was no goodwill impairment with respect to its reporting units. Acquisition-related Intangible Assets The following table summarizes Acquisition-related Intangible Assets: December 27, 2025 December 28, 2024 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount (In millions) (In millions) Developed technology $ 13,599 $ (3,560) $ 10,039 $ 13,408 $ (2,529) $ 10,879 Customer relationships 12,324 (6,267) 6,057 12,324 (5,124) 7,200 Product trademarks 914 (305) 609 914 (225) 689 Acquisition-related intangible assets subject to amortization 26,837 (10,132) 16,705 26,646 (7,878) 18,768 In-process research and development (IPR&D …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

Income Taxes Continuing Operations In 2025, the Company adopted ASU 2023-09 with prospective application. ASU 2023-09 updates disclosure requirements for the reconciliation of tax expense from continuing operations, income taxes paid and modifies other income tax-related disclosures. Income before income taxes consists of the following: Year Ended December 27, 2025 December 28, 2024 December 30, 2023 (In millions) U.S. $ 4,588 $ 2,369 $ 454 Non-U.S. (422) (347) 54 Total pre-tax income including equity income in investee $ 4,166 $ 2,022 $ 508 The income tax provision (benefit) consists of: Year Ended December 27, 2025 December 28, 2024 December 30, 2023 (In millions) Current: U.S. federal $ (493) $ 1,338 $ 496 U.S. state and local 32 64 27 Non-U.S. 106 142 150 Total (355) 1,544 673 Deferred: U.S. federal 308 (311) (860) U.S. state and local (16) 6 (29) Non-U.S. (40) (858) (130) Total 252 (1,163) (1,019) Income tax provision (benefit) $ (103) $ 381 $ (346) Year Ended December 27, 2025 Amount Percentage (In millions) Statutory federal income tax expense at 21% $ 875 21.0 % State taxes, net of federal benefit* 8 0.2 % Foreign tax effects Canada Scientific Research and Experimental Development investment tax credits (55) (1.3) % Valuation allowance 51 1.2 % Other 25 0.6 % Singapore Development and expansion incentive 70 1.7 % Other 31 0.7 % Other foreign jurisdictions 43 1.0 % Effect of changes in tax laws or rates enacted in the current period (18) (0.4) % Effect of cross-border …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Leases Operating Leases The Company has entered into operating and finance leases for its corporate offices, data centers, research and development facilities and certain equipment. The leases expire at various dates through 2038, some of which include options to extend the lease for up to ten years. For 2025, 2024 and 2023, the Company recorded $196 million, $147 million and $127 million, respectively, of operating lease expense, including short-term lease expense. For 2025, 2024, and 2023, the Company recorded $100 million, $83 million, and $46 million respectively, of variable lease expense, which primarily included operating expenses and property taxes associated with the usage of facilities under the operating leases. For 2025, 2024, and 2023 cash paid for operating leases included in operating cash flows was $176 million, $155 million, and $147 million respectively. Certain operating leases contain provisions for escalating lease payments subject to changes in the consumer price index. The Companys finance and short-term leases are immaterial to the Companys Consolidated Financial Statements. Supplemental information as of and for the year December 27, 2025 related to leases is as follows: December 27, 2025 December 28, 2024 Weighted-average remaining lease term in years operating leases 6.95 7.28 Weighted-average discount rate operating leases 4.74 % 4.63 % Future minimum lease payments under non-cancellable operating lease liabilities as of December 27, 2025 are as fo …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

Recently Issued Accounting Standard Updates Adopted In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) Income Taxes - Improvement to Income Tax Disclosures (ASU 2023-09) that requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosures. The Company adopted ASU 2023-09 in the fourth quarter of 2025, with prospective application. See Note 17 - Income Taxes for further information. Recently Issued Accounting Standard Updates Not Yet Adopted In November 2024, the FASB issued ASU 2024-03 Disaggregation - Income Statement Expenses (DISE) that expanded the annual and interim disclosure of certain costs and expense categories into specified categories in the notes to the financial statements. The ASU will be effective for the Company beginning with the fiscal year 2027 and interim periods thereafter, and could be applied either prospectively or retrospectively, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its financial statements. Although there are several other new accounting pronouncements issued by the FASB, the Company does not believe any of these accounting pronouncements had or will have a material impact on its financial statements

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Retirement Benefit Plans The Company provides retirement benefit plans in the United States and certain foreign countries. The Company has a 401(k) retirement plan that allows participating employees in the United States to contribute as defined by the plan and subject to Internal Revenue Service limitations. The Company matches 75% of employees contributions up to 6% of their eligible compensation. The Companys contributions to the 401(k) plan for 2025, 2024 and 2023 were approximately $84 million, $78 million and $70 million, respectively. …

PensionAndOtherPostretirementBenefitsDisclosureTextBlock · excerpt; the full note is in the filing

Segment Reporting Management, including the Chief Operating Decision Maker (CODM), who is the Companys Chief Executive Officer, reviews and assesses operating performance using segment net revenue, consolidated cost of sales and operating expenses and operating income (loss). These performance measures include the allocation of expenses to the reportable segments based on managements judgment. The CODM is regularly provided segment operating income to assess relative segment performance. In the first quarter of fiscal year 2025, the Company changed its segment structure, combining the Client and Gaming segments into one reportable segment to align with how the Company manages its business. All prior period segment data were retrospectively adjusted. The Companys three reportable segments are: the Data Center segment, which primarily includes Artificial Intelligence (AI) accelerators, microprocessors (CPUs) for servers, graphics processing units (GPUs), accelerated processing units (APUs), data processing units (DPUs), AI Network Interface Cards (AI NICs), Field Programmable Gate Arrays (FPGAs) and adaptive System-on-Chip (SoC) products for data centers; the Client and Gaming segment, which primarily includes CPUs, APUs, chipsets for desktops and notebooks, discrete GPUs, and semi-custom SoC products and development services; and the Embedded segment, which primarily includes embedded CPUs, APUs, FPGAs, System on Modules (SOMs), and adaptive SoC products. From time to time, th …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

Basis of Presentation and Significant Accounting Policies Fiscal Year . The Company uses a 52- or 53-week fiscal year ending on the last Saturday in December. Fiscal years 2025, 2024 and 2023 ended on December 27, 2025, December 28, 2024 and December 30, 2023, respectively. Fiscal years 2025, 2024 and 2023 each consisted of 52 weeks. Principles of Consolidation. The Consolidated Financial Statements include the Companys accounts and those of its wholly-owned subsidiaries. Reclassification and Change in Presentation. Certain amounts from fiscal years 2024 and 2023 were reclassified to conform to current period presentation. These include the balance sheet presentation of Receivables from related parties within Prepaid expenses and other current assets, Operating lease right-of-use assets and Investment: equity method within Other non-current assets, and Payables to related parties within Accounts payable. Use of Estimates. The preparation of Consolidated Financial Statements in conformity with U.S. generally accepted accounting principles (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of commitments and contingencies at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results are likely to differ from those estimates, and such differences may be material to the financial statements. Areas where management uses s …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

Subsequent Events Subsequent to December 27, 2025, the Company entered into an agreement to guarantee a commercial partner's data center lease obligations in the event of their default. The maximum gross exposure is $4.1 billion, which will be reduced as the commercial partner makes payments to the lessor over 15 years, or if the commercial partner enters into an agreement to sell the data center capacity to a third party. The fair value of the guarantee liability is not expected to be material to the Consolidated Financial Statements.

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Debt, Revolving Credit Facility and Commercial Paper Program Debt The Companys debt as of June 27, 2026 and December 27, 2025 consisted of the following: June 27, 2026 December 27, 2025 (In millions) 4.212% Senior Notes Due 2026 (4.212% Notes) $ 875 $ 875 4.319% Senior Notes Due 2028 (4.319% Notes) 625 625 2.375% Senior Notes Due 2030 (2.375% Notes) 750 750 3.924% Senior Notes Due 2032 (3.924% Notes) 500 500 4.393% Senior Notes Due 2052 (4.393% Notes) 500 500 Total debt (principal amount) 3,250 3,250 Unamortized debt discount and issuance costs (24) (28) Total debt (net) 3,226 3,222 Less: current portion of long-term debt and related unamortized debt issuance costs (875) (874) Total long-term debt (net) $ 2,351 $ 2,348 4.212% Senior Notes Due 2026 and 4.319% Senior Notes Due 2028 On March 24, 2025, the Company issued 4.212% Notes and 4.319% Notes in aggregate principal amount of $1.5 billion, which are general unsecured senior obligations of the Company. The interest is payable semi-annually on March 24 and September 24 of each year, commencing on September 24, 2025. The Company may redeem some or all of the 4.212% Notes prior to September 24, 2026 and the 4.319% Notes prior to February 24, 2028 at a price equal to the greater of the present value of the principal amount and future interest through the maturity of the debt or 100% of the principal amount plus accrued and unpaid interest. On or after February 24, 2028, the Company may also redeem some or all of the 4.319% Note …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

Financial Instruments Financial Instruments Recorded at Fair Value on a Recurring Basis June 27, 2026 December 27, 2025 (In millions) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Cash equivalents Money market funds $ 752 $ $ $ 752 $ 620 $ $ $ 620 Corporate debt securities 1,049 1,049 1,869 1,869 U.S. government and agency securities 250 1,074 1,324 1,148 300 1,448 Non-U.S. government and agency securities 134 134 245 245 Time deposits and certificates of deposits 142 142 173 173 Short-term investments Corporate debt securities 5,354 5,354 3,107 3,107 U.S. government and agency securities 1,333 1,113 2,446 901 718 1,619 Non-U.S. government and agency securities 119 119 256 256 Time deposits and certificates of deposits 86 86 10 10 Asset-backed and mortgage-backed securities 20 20 22 22 Other non-current assets Long-term investments 1,194 26 1,220 198 202 400 Deferred compensation plan investments 312 312 257 257 Total assets measured at fair value $ 3,841 $ 9,091 $ 26 $ 12,958 $ 3,124 $ 6,700 $ 202 $ 10,026 Long-term investments primarily consist of equity investments in previously non-marketable equity securities that became publicly traded during the second quarter of fiscal year 2026 and were reclassified to Level 1 upon the availability of quoted market prices. As of June 27, 2026, net unrealized gains from marketable equity securities were $425 million and were not material as of December 27, 2025. As of June 27, 2026 and December 27, 2025, long-term invest …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

Goodwill and Acquisition-related Intangibles, net Goodwill The following table summarizes Goodwill: (in millions) Data Center Embedded Client and Gaming Total December 27, 2025 $ 3,690 $ 21,072 $ 364 $ 25,126 Measurement period adjustments related to prior acquisitions 218 218 Current period acquisitions 126 126 June 27, 2026 $ 4,034 $ 21,072 $ 364 $ 25,470 Acquisition-related Intangibles, net The following table summarizes Acquisition-related Intangibles Assets: June 27, 2026 December 27, 2025 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount (In millions) (In millions) Developed technology $ 13,624 $ (4,082) $ 9,542 $ 13,599 $ (3,560) $ 10,039 Customer relationships 12,324 (6,801) 5,523 12,324 (6,267) 6,057 Product trademarks 914 (344) 570 914 (305) 609 Total acquisition-related intangible assets, net $ 26,862 $ (11,227) $ 15,635 $ 26,837 $ (10,132) $ 16,705 Acquisition-related intangible amortization expense was $544 million and $1.1 billion for the three and six months ended June 27, 2026, respectively. Acquisition-related intangible amortization expense was $568 million and $1.1 billion for the three and six months ended June 28, 2025, respectively. Based on the carrying value of acquisition-related intangibles recorded as of June 27, 2026, and assuming no subsequent impairment of the underlying assets, the estimated future annual amortization expense for acquisition-related intangibles i …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

Income Taxes The Company determines its income taxes for interim reporting periods by applying the Companys estimated annual effective tax rate to the year-to-date results, adjusted for tax items discrete to each period. Continuing Operations For the three and six months ended June 27, 2026, the Company recorded an income tax provision from continuing operations of $252 million and $490 million representing an effective tax rate of 9.8% and 11.8%, respectively. The difference between the U.S. federal statutory tax rate of 21% and the Companys estimated annual effective tax rate was primarily due to the income tax benefit from foreign-derived deduction eligible income (FDDEI), and research and development (R&D) tax credits. For the three and six months ended June 28, 2025, the Company recorded an income tax benefit from continuing operations of $834 million and $711 million representing an effective tax rate of 1,263.6% and (92.8)%, respectively. The tax benefit for the three and six months ended June 28, 2025 reflected a discrete tax benefit of $792 million and $781 million, respectively, primarily due to a tax benefit of $853 million related to the release of uncertain tax positions pertaining to the reasonable cause relief for dual consolidated losses approved by the Internal Revenue Service (IRS) in April 2025, partially offset by other items, including deferred tax expense associated with the expected gain on the transfer of appreciated assets related to the acquisiti …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Significant Accounting Policies. There have been no material changes to the Companys significant accounting policies in Note 2 - Basis of Presentation and Significant Accounting Policies, of the Notes to Condensed Consolidated Financial Statements included in the Companys Annual Report on Form 10-K for the fiscal year ended December 27, 2025. …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

Segment Reporting Management, including the Chief Operating Decision Maker (CODM), who is the Companys Chief Executive Officer, reviews and assesses operating performance using segment net revenue, cost of sales and operating expenses, and operating income (loss). These performance measures include the allocation of expenses to the reportable segments based on managements judgment. The CODM is regularly provided segment operating income to assess relative segment performance. The Companys three reportable segments are: the Data Center segment, which primarily includes Artificial Intelligence (AI) accelerators, microprocessors (CPUs) for servers, graphics processing units (GPUs), accelerated processing units (APUs), data processing units (DPUs), AI Network Interface Cards (AI NICs), Field Programmable Gate Arrays (FPGAs) and adaptive System-on-Chip (SoC) products for data centers; the Client and Gaming segment, which primarily includes CPUs, APUs, chipsets for desktops and notebooks, discrete GPUs, and semi-custom SoC products and development services; and the Embedded segment, which primarily includes embedded CPUs, APUs, FPGAs, System on Modules (SOMs), and adaptive SoC products. From time to time, the Company may also sell or license portions of its IP portfolio. In addition to these reportable segments, the Company has an All Other category, which is not a reportable segment. This category primarily includes certain expenses and credits that are not allocated to any of the …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

Basis of Presentation and Significant Accounting Policies Basis of Presentation. The accompanying unaudited condensed consolidated financial statements of AMD have been prepared in accordance with United States generally accepted accounting principles (U.S. GAAP) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. The results of operations for the three and six months ended June 27, 2026 shown in this report are not necessarily indicative of results to be expected for the full year ending December 26, 2026 or any other future period. In the opinion of the Companys management, the information contained herein reflects all adjustments necessary for a fair presentation of the Companys results of operations, financial position, cash flows and stockholders equity. All such adjustments are of a normal, recurring nature. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements in the Companys Annual Report on Form 10-K for the fiscal year ended December 27, 2025. The Company uses a 52- or 53-week fiscal year ending on the last Saturday in December. The three and six months ended June 27, 2026 and June 28, 2025 each consisted of 13 and 26 weeks, respectively. Use of Estimates. The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets a …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing