ADVANCED MICRO DEVICES INC
For the period ended Jun 28, 2025. Filed Aug 6, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 28, 2025 · Filed Aug 6, 2025
AMD$449.04+11.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-29; filed 2025-05-07.
0000002488-25-000047
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-28; filed 2025-08-06.
0000002488-25-000108
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 79 previous paragraphs and 88 current paragraphs.
36 unchanged; 30 reworded; 21 added; 13 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 4 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (21)
Current report
Gross margin for the three months ended June 28, 2025 was 40% compared to gross margin of 49% for the prior year period. The decrease in gross margin was primarily due to approximately $800 million of inventory and related charges associated with the U.S. government export control on AMD Instinct™ MI308 Data Center GPU products.
Current report
Operating loss for the three months ended June 28, 2025 was $134 million compared to operating income of $269 million for the prior year period. The decrease in operating income was due to lower gross margin and higher operating expenses. Net income for the three months ended June 28, 2025 was $872 million compared to net income of $265 million for the prior year period. The increase in net income was primarily driven by the income tax benefit resulting from an $853 million release of uncertain tax positions pertaining to the reasonable cause relief for dual consolidated losses received from the Internal Revenue Services (IRS).
Current report
At the time of the announcement of the ZT Systems acquisition in August 2024, we disclosed our intent to divest ZT Systems’ data center infrastructure manufacturing business (the ZT Manufacturing Business), while retaining only certain intellectual property and employees (the ZT Design Business). Accordingly, upon acquisition, we classified the ZT Manufacturing Business and its related assets and liabilities as held for sale. The results of the ZT Design Business and the ZT Manufacturing Business are presented within continuing operations and discontinued operations of AMD’s consolidated statements of operations and cash flows, respectively. The consolidated statements of operations include immaterial revenue attributable to the ZT Design Business, which is reported within the Data Center segment from the Acquisition Date.
Current report
On May 18, 2025, we entered into an equity purchase agreement (the Sale Agreement) with Sanmina Corporation to sell the ZT Manufacturing Business for $3.0 billion in cash and stock, inclusive of a contingent payment of up to $450 million, subject to customary adjustments for working capital and other items. The Sale Agreement provides that if the sale is not completed by May 18, 2026, subject to two automatic extensions until November 18, 2026, we will be entitled to receive a termination fee of up to $153 million. The transaction is expected to close near the end of 2025, subject to regulatory approvals and customary closing conditions.
Current report
Business Combinations. We allocate the fair value of purchase consideration to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. Such valuations require management to make significant estimates and assumptions, especially with respect to assets and liabilities held for sale, intangible assets and contingent consideration. Significant estimates and inputs used in valuing acquired assets and liabilities held for sale, developed technology, and other identifiable intangible assets include, but are not limited to, expected future revenue, future changes in technology, useful lives, and risk-adjusted discount rates. Management's estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Allocation of purchase consideration to identifiable assets and liabilities affects our amortization expense, as acquired finite-lived intangible assets are amortized over their useful life, whereas any indefinite-lived intangible assets, including goodwill, are not amortized.
Current report
Results of Continuing Operations
Current report
Data Center operating loss was $155 million for the three months ended June 28, 2025, compared to operating income of $743 million for the prior year period. Data Center operating income was $777 million for the six months ended June 28, 2025, compared to operating income of $1.3 billion for the prior year period. The decrease in operating income in both periods was primarily due to approximately $800 million of inventory and related charges associated with the U.S. government export control on AMD Instinct MI308 GPU products and higher R&D expense.
Current report
Client and Gaming net revenue of $3.6 billion for the three months ended June 28, 2025 increased by 69%, compared to net revenue of $2.1 billion for the prior year period. Client and Gaming net revenue of $6.6 billion for the six months ended June 28, 2025 increased by 48%, compared to net revenue of $4.4 billion for the prior year period.
Current report
Gaming revenue for the three months ended June 28, 2025 was $1.1 billion, up 73% from the prior year period. Gaming revenue for the six months ended June 28, 2025 was $1.8 billion, up 13% from the prior year period. The increase in both periods was primarily due to an increase in semi-custom and gaming graphics revenue.
Current report
Embedded operating income was $275 million for the three months ended June 28, 2025, compared to operating income of $345 million for the prior year period. Embedded operating income was $603 million for the six months ended June 28, 2025, compared to operating income of $687 million for the prior year period. The decrease in operating income in both periods was primarily due to product mix.
Current report
Gross Margin and Expenses
Current report
Gross margin was 40% and 49% for the three months ended June 28, 2025 and June 29, 2024, respectively. Gross margin was 45% and 48% for the six months ended June 28, 2025 and June 29, 2024, respectively. The decrease in gross margin in both periods was primarily due to approximately $800 million of inventory and related charges associated with the U.S. government export control on AMD Instinct MI308 Data Center GPU products.
Current report
Interest expense for the three and six months ended June 28, 2025 was $38 million and $58 million, respectively. Interest expense for the three and six months ended June 29, 2024 was $25 million and $50 million, respectively.
Current report
The increase in both periods was due to the issuance of $1.5 billion in aggregate principal amount of 4.212% Notes and 4.319% Notes on March 24, 2025.
Current report
Other income (expense), net for three and six months ended June 28, 2025 was $98 million and $137 million, respectively. Other income (expense), net for the three and six months ended June 29, 2024 was $55 million and $108 million, respectively. The increase was primarily due to unrealized gains and dividends received from investments in nonmarketable securities of privately held companies.
Current report
For the three and six months ended June 28, 2025, we recorded an income tax benefit of $834 million and $711 million representing an effective tax rate from continuing operations of 1,263.6% and (93)%, 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 reserves for uncertain tax positions pertaining to the reasonable cause relief for dual consolidated losses approved by the IRS in April 2025, partially offset by other items, including $45 million of deferred tax expense associated with the expected gain on the transfer of appreciated assets related to the ZT Systems acquisition.
Current report
For the three and six months ended June 29, 2024, we recorded an income tax provision of $41 million and an income tax benefit of $11 million representing an effective tax rate from continuing operations of 13.4% and (2.9)%, respectively. The tax provision for the three months ended June 29, 2024 reflected a discrete tax expense of $21 million, primarily related to interest and penalties accrued for uncertain tax positions partially offset by the tax effects of stock-based compensation. The tax benefit for the six months ended June 29, 2024 reflected a discrete tax benefit of $40 million, primarily related to stock-based compensation.
Current report
On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted into law. The new law extended key provisions of the 2017 Tax Cuts and Jobs Act including, but not limited to, federal bonus depreciation and immediate expensing for domestic research and development expenditures. We are currently assessing the impact of OBBBA on our consolidated financial statements.
Current report
Results of Discontinued Operations
Current report
Net income from discontinued operations of $104 million includes the results of operations of the ZT Manufacturing Business, partially offset by a $35 million fair value increase in the contingent consideration liability related to the acquisition of ZT Systems and net of an income tax benefit of $24 million.
Current report
On May 18, 2025, we entered into an equity purchase agreement with Sanmina Corporation to sell the ZT Manufacturing Business for $3.0 billion in cash and stock, inclusive of a contingent payment of up to $450 million, subject to customary adjustments for working capital and other items. The transaction is expected to close near the end of 2025, subject to regulatory approvals and customary closing conditions.
Removed paragraphs (13)
Previous report
Gross margin for the three months ended March 29, 2025 was 50% compared to gross margin of 47% for the prior year period. The increase in gross margin was driven by higher Data Center segment revenue and a richer mix of Ryzen processor sales.
Previous report
Operating income for the three months ended March 29, 2025 was $806 million compared to operating income of $36 million for the prior year period. Net income for the three months ended March 29, 2025 was $709 million compared to net income of $123 million for the prior year period. The increase in operating and net income was primarily driven by higher revenue and gross margin, and lower amortization of acquisition-related intangible assets, partially offset by increased operating expenses.
Previous report
To fund a portion of the acquisition of ZT Group Int’l Inc. (ZT Systems), on March 24, 2025, we issued $1.5 billion in aggregate principal amount of senior notes, consisting of $875 million aggregate principal amount of 4.212% Senior Notes due 2026, $625 million aggregate principal amount of 4.319% Senior Notes due 2028, and $950 million in aggregate principal amount of unsecured commercial paper, with maturities of up to 60 days.
Previous report
Results of Operations
Previous report
Data Center operating income was $932 million for the three months ended March 29, 2025, compared to operating income of $541 million for the prior year period. The increase in operating income was primarily driven by higher revenue, partially offset by higher operating expenses.
Previous report
Embedded operating income was $328 million for the three months ended March 29, 2025, compared to operating income of $342 million for the prior year period. The decrease in operating income was primarily due to lower revenue.
Previous report
Comparison of Gross Margin, Expenses, Interest Expense, Other Income (Expense) and Income Taxes
Previous report
Gross margin was 50% and 47% for the three months ended March 29, 2025 and March 30, 2024, respectively. The increase was driven by higher Data Center segment revenue and a richer mix of Ryzen processor sales.
Previous report
Interest expense for the three months ended March 29, 2025 was $20 million, a decrease of $5 million, or 20%, compared to $25 million for the prior year period. Interest expense decreased due to the repayment of our 2.95% Senior Notes that matured in June 2024.
Previous report
Other income (expense), net for three months ended March 29, 2025 was $39 million, a decrease of $14 million, or 26%, compared to $53 million for the prior year period. The decrease for the three months period was primarily due to lower interest income from lower balances held in short-term investments compared to the prior period.
Previous report
For the three months ended March 29, 2025, we recorded an income tax provision of $123 million representing an effective tax rate of 14.8%. The difference between the U.S. federal statutory tax rate of 21% and our estimated annual effective tax rate was primarily due to the income tax benefit from foreign-derived intangible income (FDII) and research and development (R&D) tax credits, partially offset by the tax rate detriment from foreign earnings.
Previous report
For the three months ended March 30, 2024, we recorded an income tax benefit of $52 million representing an effective tax rate of (73.2)%. The difference between the U.S. federal statutory tax rate of 21% and our estimated annual effective tax rate was primarily due to the income tax benefit from foreign-derived intangible income (FDII) and research and development (R&D) tax credits, partially offset by the tax rate detriment from foreign earnings. In addition, the tax benefit reflected discrete income tax benefits of $61 million, primarily related to tax effects of stock-based compensation.
Previous report
To fund a portion of the acquisition of ZT Systems, on March 24, 2025, we issued $1.5 billion of senior notes, consisting of $875 million aggregate principal amount of our 4.212% Senior Notes due 2026, $625 million aggregate principal amount of our 4.319% Senior Notes due 2028, and $950 million in aggregate amount of commercial paper.
Reworded paragraphs (30)
Previous wording
The statements in this report include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations and beliefs and involve numerous risks and uncertainties that could cause actual results to differ materially from expectations. These forward-looking statements speak only as of the date hereof or as of the dates indicated in the statements and should not be relied upon as predictions of future events, as we cannot assure you that the events or circumstances reflected in these statements will be achieved or will occur. You can identify forward-looking statements by the use of forward-looking terminology including “believes,” “expects,” “may,” “will,” “should,” “seeks,” “intends,” “plans,” “pro forma,” “estimates,” “anticipates,” or the negative of these words and phrases, other variations of these words and phrases or comparable terminology. The forward-looking statements relate to, among other things: possible impact of future accounting rules on AMD’s condensed consolidated financial statements; demand for AMD’s products; AMD’s strategy and expected benefits; the growth, change and competitive landscape of the markets in which AMD participates; the expectation that international sales will continue to be a significant portion of total sales in the foreseeable future; the expectation that AMD’s cash, cash equivalents and short-term investment balances, together with the availability under that certain revolving credit facility made available to AMD and certain of its subsidiaries, our commercial paper program, and our cash flows from operations will be sufficient to fund AMD’s operations including capital expenditures, purchase commitments and strategic activities over the next 12 months and beyond; AMD’s ability to access capital markets; AMD’s ability to obtain sufficient external financing on favorable terms, or at all; AMD’s expectation that based on management’s current knowledge, the potential liability related to AMD’s current litigation will not have a material adverse effect on its financial positions, results of operation or cash flows; anticipated ongoing and increased costs related to enhancing and implementing information security controls; the expectation that revenue allocated to remaining performance obligations that are unsatisfied will be recognized in the next 12 months and that a small number of customers will continue to account for a substantial part of AMD’s revenue in the future; the expected implications from the development of the legal and regulatory environment relating to emerging technologies, such as AI; AMD’s ability to achieve its corporate responsibility initiatives; expected future AI trends and developments; the expected benefits of AMD’s acquisition of ZT Group Int’l, Inc. (ZT Systems); AMD seeking a strategic partner to acquire ZT Systems manufacturing business; the extent of impact of export restrictio…
Excerpt shortened here; the source contains the full paragraph.
Current wording
The statements in this report include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations and beliefs and involve numerous risks and uncertainties that could cause actual results to differ materially from expectations. These forward-looking statements speak only as of the date hereof or as of the dates indicated in the statements and should not be relied upon as predictions of future events, as we cannot assure you that the events or circumstances reflected in these statements will be achieved or will occur. You can identify forward-looking statements by the use of forward-looking terminology including “believes,” “expects,” “may,” “will,” “should,” “seeks,” “intends,” “plans,” “pro forma,” “estimates,” “anticipates,” or the negative of these words and phrases, other variations of these words and phrases or comparable terminology. The forward-looking statements relate to, among other things: possible impact of future accounting rules on AMD’s condensed consolidated financial statements; demand for AMD’s products; AMD’s strategy and expected benefits; the growth, change and competitive landscape of the markets in which AMD participates; the expectation that international sales will continue to be a significant portion of total sales in the foreseeable future; the expectation that AMD’s cash, cash equivalents, short-term investments and cash flows from operations along with our revolving credit facility and our commercial paper program will be sufficient to fund AMD’s operations, capital expenditures, purchase commitments and strategic activities over the next 12 months and beyond; AMD’s ability to access capital markets; AMD’s expectation that based on management’s current knowledge, the potential liability related to AMD’s current litigation will not have a material adverse effect on its financial positions, results of operation or cash flows; anticipated ongoing and increased costs related to enhancing and implementing information security controls; the expectation that revenue allocated to remaining performance obligations that are unsatisfied will be recognized in the next 12 months; that a small number of customers will continue to account for a substantial part of AMD’s revenue in the future; the expected implications from the development of the legal and regulatory environment relating to emerging technologies, such as AI; AMD’s ability to achieve its corporate responsibility initiatives; compliance costs associated with new or developing sustainability laws and requirements; expected future AI trends and developments; the expected benefits of AMD’s acquisition of ZT Group Int’l, Inc. (ZT Systems); AMD’s pending sale of ZT Systems’ manufacturing business; the extent of impact of export restrictions imposed on by the U.S. on our business; and AMD’s expectation to fund stock repurchases through cash generated from operations. …
Excerpt shortened here; the source contains the full paragraph.
Previous wording
AMD, the AMD Arrow logo, EPYC, Radeon, Ryzen, Xilinx and combinations thereof are trademarks of Advanced Micro Devices, Inc. Other names are for informational purposes only and are used to identify companies and products and may be trademarks of their respective owners. “Zen” is a codename for an AMD architecture and is not a product name.
Current wording
AMD, the AMD Arrow logo, AMD Instinct, EPYC, Radeon, Ryzen, Xilinx and combinations thereof are trademarks of Advanced Micro Devices, Inc. Other names are for informational purposes only and are used to identify companies and products and may be trademarks of their respective owners. “Zen” is a codename for an AMD architecture and is not a product name.
Previous wording
In this section, we will describe the general financial condition and the results of operations of Advanced Micro Devices, Inc. and its wholly-owned subsidiaries (collectively, “us,” “our” or “AMD”), including a discussion of our results of operations for the three months ended March 29, 2025 compared to the prior year period and an analysis of changes in our financial condition.
Current wording
In this section, we will describe the general financial condition and the results of operations of Advanced Micro Devices, Inc. and its wholly-owned subsidiaries (collectively, “we”, “us,” “our”, “AMD” or the “Company”), including a discussion of our results of operations for the three and six months ended June 28, 2025 compared to the prior year period and an analysis of changes in our financial condition.
Previous wording
Beginning with the fiscal year ending December 27, 2025, we combined the Client and Gaming segments into one reportable segment to align with how we manage our business. Net revenue for the three months ended March 29, 2025 was $7.4 billion, a 36% increase compared to the prior year period. The increase in net revenue was driven by an increase in Data Center segment revenue primarily driven by growth in AMD EPYC™ CPU and AMD Instinct™ GPU sales, and an increase in Client and Gaming segment revenue primarily driven by strong demand for the latest “Zen 5” AMD Ryzen™ processors and a richer mix, partially offset by a decrease in semi-custom revenue. Embedded segment revenue decreased as demand in end markets remained mixed.
Current wording
Beginning with the fiscal year ending December 27, 2025, we combined the Client and Gaming segments into one reportable segment to align with how we manage our business. Net revenue for the three months ended June 28, 2025 was $7.7 billion, a 32% increase compared to the prior year period. The increase in net revenue was driven by an increase in Client and Gaming segment revenue primarily driven by strong demand for the latest “Zen 5” AMD Ryzen™ processors and higher semi-custom sales, and an increase in Data Center segment revenue primarily driven by growth in AMD EPYC™ CPU sales. Embedded segment revenue decreased as end market demand remained mixed.
Previous wording
As of March 29, 2025, our cash, cash equivalents and short-term investments were $7.3 billion compared to $5.1 billion as of December 28, 2024. During the three months ended March 29, 2025, we generated $939 million of cash from operating activities, and we returned $749 million to stockholders through the repurchase of common stock under our Repurchase Program.
Current wording
As of June 28, 2025, our cash, cash equivalents and short-term investments were $5.9 billion compared to $5.1 billion as of December 28, 2024. During the six months ended June 28, 2025, we generated $3.0 billion of cash from operating activities and we returned $1.2 billion to stockholders through the repurchase of common stock under our Repurchase Program.
Previous wording
On March 31, 2025, we completed the acquisition of ZT Systems to help accelerate the end-to-end design and deployment of AMD-powered AI infrastructure at scale for the cloud. At the close of the acquisition, we paid $3.375 billion in cash, subject to certain purchase price adjustments, and issued 8,335,849 shares of our common stock. To the extent certain conditions are met, we will pay an additional $300 million in cash and issue up to 740,961 shares of our common stock. We are actively seeking a strategic partner to acquire ZT Systems' manufacturing business.
Current wording
On March 31, 2025 (the Acquisition Date), we completed the acquisition of ZT Group Int’l, Inc. (ZT Systems), which is expected to enable AMD to deliver end-to-end AI solutions and accelerate the design and deployment of AMD-powered AI infrastructure at scale optimized for the cloud. At the close of the acquisition, we paid $3.2 billion in cash and issued 8,335,849 shares of our common stock. To the extent contingencies are fully met, we will pay an additional $300 million in cash and issue up to 740,961 shares of our common stock.
Previous wording
Our discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP). The preparation of our financial statements requires us to make estimates and judgments that affect the reported amounts in our consolidated financial statements. We evaluate our estimates on an ongoing basis, including those related to our revenue, inventories, goodwill, long-lived and intangible assets, and income taxes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Although actual results have historically been reasonably consistent with management’s expectations, the actual results may differ from these estimates or our estimates may be affected by different assumptions or conditions.
Current wording
Our discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP). The preparation of our financial statements requires us to make estimates and judgments that affect the reported amounts in our consolidated financial statements. We evaluate our estimates on an ongoing basis, including those related to our revenue, inventories, goodwill, long-lived and intangible assets, business combination accounting and income taxes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Although actual results have historically been reasonably consistent with management’s expectations, the actual results may differ from these estimates or our estimates may be affected by different assumptions or conditions.
Previous wording
Management believes there have been no significant changes for the three months ended March 29, 2025 to the items that we disclosed as our critical accounting estimates in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of our Annual Report on Form 10-K for the fiscal year ended December 28, 2024.
Current wording
Other than the estimates used in accounting for business combinations, management believes there have been no significant changes for the three and six months ended June 28, 2025 to the items that we disclosed as our critical accounting estimates in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of our Annual Report on Form 10-K for the fiscal year ended December 28, 2024.
Previous wording
Beginning with the fiscal year ending December 27, 2025, we combined the Client and Gaming segments into one reportable segment to align with how we manage our business. Each of the Client and Gaming businesses do not qualify as a reportable operating segment, however, we continue to separately disclose revenues for each business. All prior period segment data were retrospectively adjusted.
Current wording
Beginning with the fiscal year ending December 27, 2025, we combined the Client and Gaming segments into one reportable segment to align with how we manage our business. Neither of the Client and Gaming businesses qualify as a separate reportable operating segment, however, we continue to separately disclose revenues for each business. All prior period segment data were retrospectively adjusted.
Previous wording
Data Center net revenue of $3.7 billion for the three months ended March 29, 2025 increased by 57%, compared to net revenue of $2.3 billion for the prior year period. The increase was primarily driven by the growth in AMD EPYC CPU and AMD Instinct GPU sales.
Current wording
Data Center net revenue of $3.2 billion for the three months ended June 28, 2025 increased by 14%, compared to net revenue of $2.8 billion for the prior year period. Data Center net revenue of $6.9 billion for the six months ended June 28, 2025 increased by 34%, compared to net revenue of $5.2 billion for the prior year period. The increase in both periods was primarily driven by the growth in AMD EPYC™ CPU sales.
Previous wording
Client and Gaming net revenue of $2.9 billion for the three months ended March 29, 2025 increased by 28%, compared to net revenue of $2.3 billion for the prior year period. Client revenue was $2.3 billion, up 68% from the prior year period, primarily driven by a 43% increase in average selling price, and a 23% increase in unit shipments of AMD Ryzen mobile and desktop processors. Gaming revenue was $647 million, down 30% from the prior year period, primarily due to a decrease in semi-custom revenue.
Current wording
Client revenue for the three months ended June 28, 2025 was $2.5 billion, up 67% from the prior year period, primarily driven by a 42% increase in average selling price, and a 17% increase in unit shipments of AMD Ryzen mobile and desktop processors. Client revenue for the six months ended June 28, 2025 was $4.8 billion, up 68% from the prior year period, primarily driven by a 43% increase in average selling price and 20% increase in unit shipments of AMD Ryzen mobile and desktop processors.
Previous wording
Client and Gaming operating income was $496 million for the three months ended March 29, 2025, compared to operating income of $237 million for the prior year period. The increase in operating income was primarily driven by higher revenue, partially offset by higher operating expenses.
Current wording
Client and Gaming operating income was $767 million for the three months ended June 28, 2025, compared to operating income of $166 million for the prior year period. Client and Gaming operating income was $1.3 billion for the six months ended June 28, 2025, compared to operating income of $403 million for the prior year period. The increase in operating income was primarily driven by higher revenue, partially offset by higher operating expenses.
Previous wording
Embedded net revenue of $823 million for the three months ended March 29, 2025 decreased by 3%, compared to net revenue of $846 million for the prior year period. Net revenue decreased as demand in end markets remain mixed.
Current wording
Embedded net revenue of $824 million for the three months ended June 28, 2025 decreased by 4%, compared to net revenue of $861 million for the prior year period. Embedded net revenue of $1.6 billion for the six months ended June 28, 2025 decreased by 4%, compared to net revenue of $1.7 billion for the prior year period. Net revenue decreased in both periods as end market demand remained mixed.
Previous wording
All Other operating loss of $950 million for the three months ended March 29, 2025 primarily consisted of $567 million of amortization of acquisition-related intangibles and $364 million of stock-based compensation expense. All Other operating loss of $1.1 billion for the prior year period primarily consisted of $622 million of amortization of acquisition-related intangibles, $371 million of stock-based compensation expense and $65 million of inventory loss at a contract manufacturer.
Current wording
All Other operating loss of $1.0 billion for the three months ended June 28, 2025 primarily consisted of $568 million of amortization of acquisition-related intangibles and $369 million of stock-based compensation expense. All Other operating loss of $985 million for the three months ended June 29, 2024 primarily consisted of $603 million of amortization of acquisition-related intangibles and $346 million of stock-based compensation expense.
Previous wording
International sales as a percentage of net revenue were 66% and 60% for the three months ended March 29, 2025 and March 30, 2024, respectively. We expect that international sales will continue to be a significant portion of total sales in the foreseeable future. Substantially all of our sales transactions were denominated in U.S. dollars.
Current wording
International sales as a percentage of net revenue were 71% and 60% for the three months ended June 28, 2025 and June 29, 2024, respectively. International sales as a percentage of net revenue were 69% and 60% for the six months ended June 28, 2025 and June 29, 2024, respectively. We expect that international sales will continue to be a significant portion of total sales in the foreseeable future. Substantially all of our sales transactions were denominated in U.S. dollars.
Previous wording
The following is a summary of certain Condensed Consolidated Statement of Operations data for the periods indicated:
Current wording
The following is a summary of certain consolidated statement of operations data for the periods indicated:
Previous wording
Research and development expenses of $1.7 billion for the three months ended March 29, 2025 increased by $203 million, or 13%, compared to $1.5 billion for the prior year period. The increase was primarily due to higher employee-related costs from an increase in headcount in support of our continued focus on our AI strategy.
Current wording
Research and development expenses of $1.9 billion for the three months ended June 28, 2025 increased by $311 million, or 20%, compared to $1.6 billion for the prior year period. Research and development expenses of $3.6 billion for the six months ended June 28, 2025 increased by $514 million, or 17%, compared to $3.1 billion for the prior year period. The increase in both periods was primarily due to higher employee-related costs from an increase in headcount from acquisitions, in support of our continued focus on our AI strategy.
Previous wording
Marketing, general and administrative expenses of $886 million for the three months ended March 29, 2025 increased by $279 million, or 46%, compared to $607 million for the prior year period. The increase was primarily due to an increase in go-to-market activities in our Client and Gaming segment.
Current wording
Marketing, general and administrative expenses of $991 million for the three months ended June 28, 2025 increased by $351 million, or 55%, compared to $640 million for the prior year period. Marketing, general and administrative expenses of $1.9 billion for the six months ended June 28, 2025 increased by $630 million, or 51%, compared to $1.2 billion for the prior year period. The increase in both periods was primarily due to an increase in go-to-market activities in our Client and Gaming segment.
Previous wording
Amortization of acquisition-related intangibles of $567 million for the three months ended March 29, 2025 decreased by $55 million, or 9%, compared to $622 million for the prior year period. The decrease was primarily due to certain acquisition-related intangibles that were fully amortized in the prior fiscal year.
Current wording
Amortization of acquisition-related intangibles of $568 million for the three months ended June 28, 2025 decreased by $35 million, or 6%, compared to $603 million for the prior year period. Amortization of acquisition-related intangibles of $1.1 billion for the six months ended June 28, 2025 decreased by $90 million, or 7%, compared to $1.2 billion for the prior year period. The decrease in both periods was primarily due to certain acquisition-related intangibles that were fully amortized in the prior fiscal year, partially offset by amortization of intangible assets from current fiscal quarter acquisitions.
Previous wording
As of March 29, 2025 and December 28, 2024, our cash, cash equivalents and short-term investments were $7.3 billion and $5.1 billion, respectively.
Current wording
As of June 28, 2025 and December 28, 2024, our cash, cash equivalents and short-term investments were $5.9 billion and $5.1 billion, respectively.
Previous wording
Our operating, investing and financing activities for the three months ended March 29, 2025 compared to the prior year period are as described below:
Current wording
Our operating, investing and financing activities for the six months ended June 28, 2025 compared to the prior year period are as described below:
Previous wording
On March 31, 2025, we completed the acquisition of ZT Systems. At the close of the acquisition, we paid $3.375 billion in cash, subject to certain purchase price adjustments, and issued 8,335,849 shares of our common stock. In addition, to the extent certain conditions are met following the closing of the acquisition, we will pay an additional $300 million in cash and issue up to 740,961 shares of our common stock. We are actively seeking a strategic partner to acquire ZT Systems' manufacturing business.
Current wording
On March 31, 2025, we completed the acquisition of ZT Systems. At the close of the acquisition, we paid $3.2 billion in cash and issued 8,335,849 shares of our common stock. To the extent contingencies are fully met, we will pay an additional $300 million in cash and issue up to 740,961 shares of our common stock.
Previous wording
We may issue unsecured commercial paper up to a maximum principal amount outstanding, at any time, of $3.0 billion, with a maturity of up to 397 days from the date of issue. As of March 29, 2025, we had $950 million of commercial paper outstanding, with maturities of up to 60 days.
Current wording
We may issue unsecured commercial paper up to a maximum principal amount outstanding, at any time, of $3.0 billion, with a maturity of up to 397 days from the date of issue. During the three months ended March 29, 2025, we issued $950 million in aggregate principal amount of commercial paper which was subsequently repaid before June 28, 2025. As of June 28, 2025, we had no commercial paper outstanding.
Previous wording
As of March 29, 2025, we had unconditional purchase commitments of approximately $8.2 billion, of which $5.6 billion are for the remainder of fiscal year 2025. On an ongoing basis, we work with our suppliers and partners on the timing of payments and deliveries of purchase commitments, taking into account business conditions.
Current wording
As of June 28, 2025, we had unconditional purchase commitments of approximately $9.4 billion, of which $5.5 billion are for the remainder of fiscal year 2025. We work continually with our suppliers and partners on the timing of payments and deliveries of purchase commitments, taking into account business conditions.
Previous wording
Net cash provided by operating activities was $939 million in the three months ended March 29, 2025, primarily due to our net income of $709 million, adjusted for non-cash and non-operating charges of $1.0 billion and net cash outflows of $0.7 billion from changes in our operating assets and liabilities. The primary drivers of the change in operating assets and liabilities were a $748 million decrease in accounts receivable due to customer payments, and a $682 million increase in inventory primarily to support the continued ramp of Data Center products in advanced process technology nodes.
Current wording
Net cash provided by operating activities of continuing operations was $2.4 billion in the six months ended June 28, 2025, primarily due to our net income of $1.6 billion, adjusted for non-cash and non-operating charges of $1.2 billion and net cash outflows of $284 million from changes in our operating assets and liabilities. The primary drivers of the change in operating assets and liabilities were a $1.1 billion decrease in accounts receivable due to higher receipts of customer payments and a $943 million increase in inventory primarily to support the continued ramp of Client and Data Center products in advanced process technology nodes. Net cash provided by operating activities of the ZT Manufacturing Business, classified as discontinued operations, was $549 million.
Previous wording
Net cash provided by operating activities was $521 million in the three months ended March 30, 2024, primarily due to our net income of $123 million, adjusted for non-cash and non-operating charges of $1.2 billion and net cash outflows of $760 million from changes in our operating assets and liabilities. The primary drivers of the change in operating assets and liabilities was a $636 million decrease in accounts payable driven primarily by the timing of payments and inventory receipts, and a $368 million increase in inventory primarily to support the continued ramp of Data Center and Client and Gaming products in advanced process nodes.
Current wording
Net cash provided by operating activities of continuing operations was $1.1 billion in the six months ended June 29, 2024, primarily due to our net income of $388 million, adjusted for non-cash and non-operating charges of $2.1 billion and net cash outflows of $1.4 billion from changes in our operating assets and liabilities. The primary drivers of the change in operating assets and liabilities was a $710 million increase in inventory primarily to support the continued ramp of Data Center and Client products in advanced process nodes, and a $373 million increase in accounts receivable due to timing of customer payments. There was no net cash provided by operating activities of discontinued operations for the six months ended June 29, 2024.
Previous wording
Net cash used in investing activities was $357 million for the three months ended March 29, 2025, which primarily consisted of cash used in the purchases of short-term investments of $304 million, purchases of strategic investments of $239 million, and purchases of property and equipment of $212 million, partially offset by $398 million of proceeds from the maturity and sale of short-term investments.
Current wording
Net cash used in investing activities of continuing operations was $2.6 billion for the six months ended June 28, 2025, which primarily consisted of cash used in acquisitions of $1.7 billion, the purchases of short-term investments of $796 million, purchases of strategic investments of $358 million, and purchases of property and equipment of $494 million, partially offset by $731 million of proceeds from the maturity and sale of short-term investments. Net cash used in investing activities of the ZT Manufacturing Business, classified as discontinued operations, was $22 million due to purchases of equipment.
Previous wording
Net cash used in investing activities was $135 million for the three months ended March 30, 2024, which primarily consisted of cash used in the purchases of short-term investments of $433 million and purchases of property and equipment of $142 million, partially offset by $443 million of proceeds from the maturity and sale of short-term investments.
Current wording
Net cash provided by investing activities of continuing operations was $251 million for the six months ended June 29, 2024 which primarily consisted of $1.2 billion of proceeds from the maturity and sale of short-term investments, partially offset by cash used in the purchases of short-term investments of $565 million and purchases of property and equipment of $296 million. There was no net cash provided by investing activities of discontinued operations for the six months ended June 29, 2024.
Previous wording
Net cash provided by financing activities was $1.7 billion for the three months ended March 29, 2025, which primarily consisted of cash received from the issuance of senior notes for $1.5 billion and commercial paper of $950 million, partially offset by stock repurchases of $749 million and stock repurchases for tax withholding on employee equity plans of $30 million.
Current wording
Net cash provided by financing activities of continuing operations was $347 million for the six months ended June 28, 2025, which primarily consisted of cash received from the issuance of senior notes of $1.5 billion and $950 million of commercial paper, partially offset by stock repurchases of $1.2 billion. There was no net cash provided by financing activities of discontinued operations for the six months ended June 28, 2025.
Previous wording
Net cash used in financing activities was $129 million for the three months ended March 30, 2024, were from repurchases for tax withholding on employee equity plans of $129 million.
Current wording
Net cash used in financing activities was $1.2 billion for the six months ended June 29, 2024, which primarily consisted of repayment of the 2.95% Notes of $750 million, common stock repurchase of $356 million, and repurchases for tax withholding on employee equity plans of $226 million. There was no net cash provided by financing activities of discontinued operations for the six months ended June 29, 2024.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
All Other operating loss of $2.0 billion for the six months ended June 28, 2025 primarily consisted of $1.1 billion of amortization of acquisition-related intangibles and $733 million of stock-based compensation expense. All Other operating loss of $2.1 billion for the six months ended June 29, 2024 primarily consisted of $1.2 billion of amortization of acquisition-related intangibles and $717 million of stock-based compensation expense.