ADVANCED MICRO DEVICES INC
For the period ended Mar 28, 2026. Filed May 6, 2026.
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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.
Mar 28, 2026 · Filed May 6, 2026
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 2025-09-27; filed 2025-11-05.
0000002488-25-000166
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-28; filed 2026-05-06.
0000002488-26-000076
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 90 previous paragraphs and 79 current paragraphs.
37 unchanged; 34 reworded; 7 added; 19 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 (7)
Current report
Client and Gaming net revenue of $3.6 billion for the three months ended March 28, 2026 increased by 23%, compared to net revenue of $2.9 billion for the prior year period.
Current report
Client net revenue of $2.9 billion for the three months ended March 28, 2026 increased by 26% compared to net revenue of $2.3 billion for the prior year period, primarily driven by a 25% increase in unit shipments and a 1% increase in average selling price primarily of AMD Ryzen mobile processors.
Current report
Gaming net revenue of $720 million for the three months ended March 28, 2026 increased by 11% compared to net revenue of $647 million for the prior year period, primarily driven by higher demand of our Radeon TM GPUs partially offset by lower semi-custom revenue.
Current report
Embedded net revenue of $873 million for the three months ended March 28, 2026 increased by 6%, compared to net revenue of $823 million for the prior year period. Net revenue increased as demand strengthened across several end markets.
Current report
Embedded operating income was $338 million for the three months ended March 28, 2026, compared to operating income of $328 million for the prior year period. The increase in operating income was primarily driven by higher revenue, partially offset by higher cost of sales and operating expenses.
Current report
Other income (expense), net for the three months ended March 28, 2026 was $165 million, an increase of $126 million, or 323%, compared to $39 million for the prior year period. The increase was primarily due to unrealized gains from long-term investments and interest income from short-term investments.
Current report
Net income from discontinued operations for the three months ended March 28, 2026 of $11 million included measurement period adjustments related to the ZT Systems acquisition and post-close adjustments related to the sale of the ZT Manufacturing business.
Removed paragraphs (19)
Previous report
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. On the Acquisition Date, we paid $3.2 billion in cash and issued 8,335,849 shares of our common stock. ZT Systems is comprised of the data center infrastructure manufacturing business (ZT Manufacturing Business), which was classified as held for sale, and the design operations (ZT Design Business).
Previous report
On October 27, 2025, we completed the sale of the ZT Manufacturing Business to Sanmina Corporation (Sanmina) for 1,151,052 shares of Sanmina common stock and $2.4 billion in cash, subject to certain purchase price adjustments, as closing consideration. We are eligible to receive additional cash consideration of up to $450 million to the extent certain conditions are met following the close of the sale.
Previous report
On October 30, 2025, we settled the contingent consideration liability associated with the acquisition of ZT Systems of $300 million in cash and 740,961 shares of the Company’s common stock with the former ZT Systems stockholders and warrant holders.
Previous report
In April 2025, new U.S. export restrictions on certain semiconductors to China led to approximately $800 million in product inventory and related charges on AMD Instinct MI308 Data Center GPU products during the second quarter of fiscal year 2025. We applied for and were granted some licenses by the U.S. government that allow us to ship MI308 products to certain China-based customers. We did not record MI308 China-based customer revenue during the three months ended September 27, 2025. Sales of our MI308 products into China depend on customer demand, China’s import control rules and our ability to obtain licenses.
Previous 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.
Previous report
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 report
Data Center operating income was $1.9 billion for the nine months ended September 27, 2025, compared to operating income of $2.3 billion for the prior year period. The decrease in operating income 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 product and higher operating expenses, partially offset by higher revenue.
Previous report
Client and Gaming net revenue of $4.0 billion for the three months ended September 27, 2025 increased by 73%, compared to net revenue of $2.3 billion for the prior year period. Client and Gaming net revenue of $10.6 billion for the nine months ended September 27, 2025 increased by 57%, compared to net revenue of $6.8 billion for the prior year period.
Previous report
Client revenue for the three months ended September 27, 2025 was $2.8 billion, up 46% from the prior year period, primarily driven by a 38% increase in average selling price, and a 4% increase in unit shipments of AMD Ryzen desktop and mobile processors. Client revenue for the nine months ended September 27, 2025 was $7.5 billion, up 59% from the prior year period, primarily driven by a 41% increase in average selling price and a 13% increase in unit shipments of AMD Ryzen desktop and mobile processors.
Previous report
Gaming revenue for the three months ended September 27, 2025 was $1.3 billion, up 181% from the prior year period. Gaming revenue for the nine months ended September 27, 2025 was $3.1 billion, up 51% from the prior year period. The increase in both periods was primarily driven by higher semi-custom revenue and strong demand of our Radeon gaming GPUs.
Previous report
Embedded net revenue of $857 million for the three months ended September 27, 2025 decreased by 8%, compared to net revenue of $927 million for the prior year period. Embedded net revenue of $2.5 billion for the nine months ended September 27, 2025 decreased by 5%, compared to net revenue of $2.6 billion for the prior year period. Net revenue decreased in both periods as certain end market demand remained mixed.
Previous report
Embedded operating income was $283 million for the three months ended September 27, 2025, compared to operating income of $372 million for the prior year period. Embedded operating income was $886 million for the nine months ended September 27, 2025, compared to operating income of $1.1 billion for the prior year period. The decrease in operating income in both periods was primarily due to lower revenue.
Previous report
All Other operating loss of $2.9 billion for the nine months ended September 27, 2025 primarily consisted of $1.7 billion of amortization of acquisition-related intangibles and $1.2 billion of stock-based compensation expense. All Other operating loss of $3.0 billion for the nine months ended September 28, 2024 primarily consisted of $1.8 billion of amortization of acquisition-related intangibles and $1.1 billion of stock-based compensation expense.
Previous report
Gross margin was 47% and 49% for the nine months ended September 27, 2025 and September 28, 2024, respectively. 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 product, partially offset by a richer mix of Ryzen processor sales.
Previous report
Other income (expense), net for three and nine months ended September 27, 2025 was $82 million and $219 million, respectively. Other income (expense), net for the three and nine months ended September 28, 2024 was $36 million and $144 million, respectively. The increase in both periods was primarily due to unrealized gains and dividends received from investments in nonmarketable securities of privately held companies.
Previous report
For the three and nine months ended September 28, 2024, we recorded an income tax benefit of $27 million and $38 million representing an effective tax rate of (3.6)% and (3.3)%, respectively. The tax benefit for the three and nine months ended September 28, 2024 reflected discrete tax benefits primarily related to tax effects of stock-based compensation partially offset by the interest and penalties accrued for uncertain tax positions.
Previous report
In July 2025, the One Big Beautiful Bill Act (OBBBA) was enacted into law. For the three and nine months ended September 27, 2025, the primary impact of the OBBBA to our tax provision was the accelerated expensing of domestic R&D activities which decreased our estimated income eligible for FDII resulting in a higher estimated annual effective tax rate. The OBBBA is also expected to reduce our deferred tax assets and our current income tax liability for fiscal year 2025. Other OBBBA changes did not have a material impact on the financial statements.
Previous report
Net income from discontinued operations for the three and nine months ended September 27, 2025 of $71 million and $175 million, respectively, include the results of operations of the ZT Manufacturing Business, partially offset by increases of $17 million and $52 million, respectively, in the fair value of the contingent consideration liability associated with the acquisition of ZT Systems.
Previous report
On March 31, 2025, we paid $3.2 billion in cash and issued 8,335,849 shares of our common stock to close the acquisition of ZT Systems.
Reworded paragraphs (34)
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, 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, 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); 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. For a discussion of the factors that could cause actual results to …
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, 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 operations 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 and receivables in the future; the expected implications from the development of the legal and regulatory environment relating to emerging technologies, such as AI; AMD’s expectation to utilize the cloud service capacity in its operations or assign the capacity; AMD’s ability to achieve its corporate responsibility initiatives; compliance costs associated with new or developing sustainability laws and requirements; expected future AI technology trends and developments; the expected benefits of AMD’s acquisitions; the extent of impact of export restrictions imposed by the U.S. on our business; and AMD’s expectation to fund stock repurchases through cash generat…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
•Artificial Intelligence (AI) accelerators, microprocessors (CPUs) for servers, graphics processing units (GPUs), accelerated processing units (APUs), data processing units (DPUs), Field Programmable Gate Arrays (FPGAs), Smart Network Interface Cards (SmartNICs) and Adaptive System-on-Chip (SoC) products for data centers;
Current wording
•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;
Previous wording
•embedded CPUs, GPUs, APUs, FPGAs, System on Modules (SOMs), and Adaptive SoC products.
Current wording
•embedded CPUs, APUs, FPGAs, System on Modules (SOMs), and adaptive SoC products.
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, “we”, “us,” “our”, “AMD” or the “Company”), including a discussion of our results of operations for the three and nine months ended September 27, 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 months ended March 28, 2026 compared to the prior year period and an analysis of changes in our financial condition.
Previous wording
Net revenue for the three months ended September 27, 2025 was $9.2 billion, a 36% 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 our AMD Ryzen™ processors, semi-custom game console SoCs and Radeon™ gaming GPUs; and an increase in Data Center segment revenue primarily driven by strong demand for our 5th generation AMD EPYC™ processors and AMD Instinct™ MI350 Series GPUs. Embedded segment revenue decreased as certain end market demand remained mixed.
Current wording
Net revenue for the three months ended March 28, 2026 was $10.3 billion, a 38% 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 strong demand for our 5th generation AMD EPYC™ processors and AMD Instinct™ MI350 Series GPUs, an increase in Client and Gaming segment revenue, primarily driven by strong demand for our AMD Ryzen™ processors and an increase in Embedded segment revenue as certain end market demand increased.
Previous wording
Gross margin for the three months ended September 27, 2025 was 52% compared to gross margin of 50% for the prior year period, a 2% increase primarily driven by product mix.
Current wording
Gross margin for the three months ended March 28, 2026 was 53% compared to gross margin of 50% for the prior year period, a 3% increase primarily driven by a favorable product mix, including higher Data Center segment revenue.
Previous wording
Operating income for the three months ended September 27, 2025 was $1.3 billion compared to operating income of $724 million for the prior year period. The increase in operating income was due to higher gross profit, partially offset by higher operating expenses. Net income for the three months ended September 27, 2025 was $1.2 billion compared to net income of $771 million for the prior year period. The increase in net income was primarily driven by higher operating income.
Current wording
Operating income for the three months ended March 28, 2026 was $1.5 billion compared to operating income of $806 million for the prior year period. The increase in operating income was due to higher gross profit, partially offset by higher operating expenses. Net income for the three months ended March 28, 2026 was $1.4 billion compared to net income of $709 million for the prior year period. The increase in net income was primarily driven by higher operating income.
Previous wording
As of September 27, 2025, our cash, cash equivalents and short-term investments were $7.2 billion compared to $5.1 billion as of December 28, 2024. During the nine months ended September 27, 2025, we generated $5.1 billion of cash from operating activities and we returned $1.3 billion to stockholders through the repurchase of common stock under our Repurchase Program.
Current wording
As of March 28, 2026, our cash, cash equivalents and short-term investments were $12.3 billion compared to $10.6 billion as of December 27, 2025. During the three months ended March 28, 2026, we generated $3.0 billion of cash from operating activities and we returned $221 million to stockholders through the repurchase of common stock under our stock repurchase program (Repurchase Program).
Previous wording
On October 5, 2025, the Company issued to OpenAI OpCo, LLC (the Warrantholder) a warrant to purchase up to an aggregate of 160 million shares of the Company’s common stock at an exercise price of $0.01 per share. The warrant shares will vest in tranches based on certain GPU purchase milestones by the Warrantholder, or its affiliates, or indirectly through third parties, and achievement of specified Company stock price targets and stock performance. Each vested tranche is further subject to the fulfillment of certain other technical and commercial conditions prior to exercise. Subject to certain conditions, the warrant is exercisable through October 5, 2030.
Current wording
In February 2026, we amended a master purchase agreement with Meta Platforms, Inc. (Meta) and Meta agreed to deploy up to 6 gigawatts of AMD GPUs, with the first gigawatt of capacity powered by custom AMD Instinct MI450-based GPU and 6th Gen AMD EPYC™ CPUs. Concurrent with the agreement, we issued to Meta a warrant to purchase up to 160 million shares of AMD’s common stock at an exercise price of $0.01 per share. The warrant will vest in tranches based on AMD Instinct GPU purchase milestones by Meta, or its affiliates, or indirectly through authorized third parties and achievement of specified AMD stock price targets. Each vested tranche is further subject to the fulfillment of certain other technical and commercial conditions by Meta prior to exercisability. The warrant is exercisable through February 23, 2031. As of March 28, 2026, none of the warrant shares had vested or become exercisable, and the warrant had no impact on our Condensed Consolidated Financial Statements for the three months then ended.
Previous wording
Other than the estimates used in accounting for business combinations, management believes there have been no significant changes for the three and nine months ended September 27, 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
There have been no significant changes for the three months ended March 28, 2026 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 27, 2025.
Previous wording
Our operating results tend to vary seasonally. Historically, our net revenue has been generally higher in the second half of the year than in the first half of the year, although market conditions and product transitions could impact this trend.
Current wording
Each of the Client and Gaming businesses do not qualify as a separate reportable operating segment, however, we continue to separately disclose revenues for each business. Our operating results tend to vary seasonally. Historically, our net revenue has been generally higher in the second half of the year than in the first half of the year, although market conditions and product transitions could impact this trend.
Previous wording
Data Center net revenue of $4.3 billion for the three months ended September 27, 2025 increased by 22%, compared to net revenue of $3.5 billion for the prior year period. Data Center net revenue of $11.3 billion for the nine months ended September 27, 2025 increased by 29%, compared to net revenue of $8.7 billion for the prior year period. The increase in both periods was primarily driven by strong demand for our 5th generation AMD EPYC™ processors and AMD Instinct™ MI350 Series GPUs.
Current wording
Data Center net revenue of $5.8 billion for the three months ended March 28, 2026 increased by 57%, compared to net revenue of $3.7 billion for the prior year period. The increase was primarily driven by strong demand for our 5th generation AMD EPYC™ processors and AMD Instinct™ MI350 Series GPUs.
Previous wording
Data Center operating income was $1.1 billion for the three months ended September 27, 2025, compared to operating income of $1.0 billion for the prior year period. The increase in operating income was primarily due to higher revenue, partially offset by higher operating expenses.
Current wording
Data Center operating income was $1.6 billion for the three months ended March 28, 2026, compared to operating income of $932 million for the prior year period. The increase in operating income was primarily driven by higher revenue, partially offset by higher cost of sales and operating expenses.
Previous wording
Client and Gaming operating income was $867 million for the three months ended September 27, 2025, compared to operating income of $288 million for the prior year period. Client and Gaming operating income was $2.1 billion for the nine months ended September 27, 2025, compared to operating income of $691 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 $575 million for the three months ended March 28, 2026, compared to operating income of $496 million for the prior year period. The increase in operating income was primarily driven by higher revenue, partially offset by higher cost of sales and operating expenses.
Previous wording
All Other operating loss of $1.0 billion for the three months ended September 27, 2025 primarily consisted of $562 million of amortization of acquisition-related intangibles and $419 million of stock-based compensation expense. All Other operating loss of $977 million for the three months ended September 28, 2024 primarily consisted of $585 million of amortization of acquisition-related intangibles and $351 million of stock-based compensation expense.
Current wording
All Other operating loss of $1.0 billion for the three months ended March 28, 2026 primarily consisted of $551 million of amortization of acquisition-related intangibles and $487 million of stock-based compensation expense. 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.
Previous wording
International sales as a percentage of net revenue were 64% and 72% for the three months ended September 27, 2025 and September 28, 2024, respectively. International sales as a percentage of net revenue were 67% and 65% for the nine months ended September 27, 2025 and September 28, 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 74% and 66% for the three months ended March 28, 2026 and March 29, 2025, 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
Gross margin was 52% and 50% for the three months ended September 27, 2025 and September 28, 2024, respectively, an increase of 2% primarily driven by product mix.
Current wording
Gross margin was 53% and 50% for the three months ended March 28, 2026 and March 29, 2025, respectively. The increase in gross margin was primarily due to a favorable product mix, including higher Data Center segment revenue.
Previous wording
Research and development expenses of $2.1 billion for the three months ended September 27, 2025 increased by $503 million, or 31%, compared to $1.6 billion for the prior year period. Research and development expenses of $5.8 billion for the nine months ended September 27, 2025 increased by $1.0 billion, or 21%, compared to $4.7 billion for the prior year period. The increase in both periods was 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 $2.4 billion for the three months ended March 28, 2026 increased by $669 million, or 39%, compared to $1.7 billion for the prior year period. The increase was due to higher employee-related costs from an increase in headcount in support of our continued focus on our AI strategy and long-term growth opportunities.
Previous wording
Marketing, general and administrative expenses of $1.1 billion for the three months ended September 27, 2025 increased by $362 million, or 51%, compared to $707 million for the prior year period. Marketing, general and administrative expenses of $2.9 billion for the nine months ended September 27, 2025 increased by $1.0 billion, or 51%, compared to $2.0 billion for the prior year period. The increase in both periods was primarily due to an increase in go‑to‑market activities to support our revenue growth.
Current wording
Marketing, general and administrative expenses of $1.3 billion for the three months ended March 28, 2026 increased by $367 million, or 41%, compared to $886 million for the prior year period. The increase was primarily due to an increase in go‑to‑market activities to support our revenue growth.
Previous wording
Amortization of acquisition-related intangibles of $562 million for the three months ended September 27, 2025 decreased by $23 million, or 4%, compared to $585 million for the prior year period. Amortization of acquisition-related intangibles of $1.7 billion for the nine months ended September 27, 2025 decreased by $113 million, or 6%, compared to $1.8 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 year acquisitions.
Current wording
Amortization of acquisition-related intangibles of $551 million for the three months ended March 28, 2026 decreased by $16 million, or 3%, compared to $567 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.
Previous wording
Interest expense for the three and nine months ended September 27, 2025 was $37 million and $95 million, respectively. Interest expense for the three and nine months ended September 28, 2024 was $23 million and $73 million, respectively. 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 wording
Interest expense for the three months ended March 28, 2026 and March 29, 2025 was $37 million and $20 million, respectively. The increase 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.
Previous wording
Other income (expense), net primarily consists of interest income from short-term investments, changes in valuation of equity investments, and foreign currency transaction gains and losses.
Current wording
Other income (expense), net primarily consists of interest income from short-term investments, changes in valuation of long-term investments, and foreign currency transaction gains and losses.
Previous wording
For the three and nine months ended September 27, 2025, we recorded an income tax provision of $153 million and an income tax benefit of $558 million representing an effective tax rate from continuing operations of 11.5% and (26.7)%, respectively. The tax provision (benefit) for both periods reflected 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, as well as a discrete tax benefit related to stock-based compensation. In addition, the tax benefit for the nine months ended September 27, 2025 also included a discrete 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.
Current wording
For the three months ended March 28, 2026, we recorded an income tax provision from continuing operations of $238 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 deduction eligible income (FDDEI), formerly FDII, and research and development (R&D) tax credits.
Previous wording
As of September 27, 2025 and December 28, 2024, our cash, cash equivalents and short-term investments were $7.2 billion and $5.1 billion, respectively.
Current wording
As of March 28, 2026 and December 27, 2025, our cash, cash equivalents and short-term investments were $12.3 billion and $10.6 billion, respectively.
Previous wording
Our operating, investing and financing activities for the nine months ended September 27, 2025 compared to the prior year period are as described below:
Current wording
Our operating, investing and financing activities for the three months ended March 28, 2026 compared to the prior year period are as described below:
Previous wording
As of September 27, 2025, our principal short-term and long-term debt obligations were $873 million and $2.3 billion, respectively.
Current wording
As of March 28, 2026 and December 27, 2025, our aggregate principal short-term and long-term debt obligations were $3.3 billion.
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. 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 September 27, 2025, we had no commercial paper outstanding.
Current wording
We also have a commercial paper program to issue unsecured commercial paper notes 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. We had no commercial paper outstanding as of March 28, 2026.
Previous wording
As of September 27, 2025, we had commitments of approximately $12.1 billion, of which $3.8 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 commitments, taking into account business conditions.
Current wording
As of March 28, 2026, we had unconditional commitments of approximately $25.7 billion, of which $18.3 billion are for the remainder of fiscal year 2026. Our contractual obligations and purchase commitments relate primarily to our obligations to purchase wafers, substrates and components from third parties and future payments related to multi-year cloud service provider arrangements, and certain software and technology licenses. We work continually with our suppliers and partners on the timing of payments and deliveries of purchase commitments, taking into account business conditions. We also have commitments for leases that have commenced for approximately $805 million and leases that have not yet commenced for $4.4 billion. In addition, as of March 28, 2026, we provided lease guarantees with maximum potential amount of future payments of $4.1 billion. For additional information on lease guarantees and commitments, refer to Notes 8 and 10 of the Notes to Condensed Consolidated Financial Statements (Part I, Item 1 of this Form 10-Q).
Previous wording
Net cash provided by operating activities of continuing operations was $4.2 billion in the nine months ended September 27, 2025, primarily due to our net income of $2.8 billion, adjusted for non-cash and non-operating charges of $2.5 billion and net cash outflows of $992 million from changes in our operating assets and liabilities. The primary drivers of the change in operating assets and liabilities were a $1.6 billion increase in inventory primarily to support the continued ramp of Client and Data Center products in advanced process technology nodes and a $998 million increase in accounts payable due to timing of vendor payments and higher inventory purchases. Net cash provided by operating activities of the ZT Manufacturing Business, classified as discontinued operations, was $920 million.
Current wording
Net cash provided by operating activities of continuing operations was $3.0 billion in the three months ended March 28, 2026, primarily due to our net income of $1.4 billion, adjusted for non-cash and non-operating charges of $1.1 billion and net cash inflows of $456 million from changes in our operating assets and liabilities. The primary drivers of the changes in operating assets and liabilities included a $713 million increase in accrued and other liabilities driven primarily by higher customer-related accruals and a $280 million reduction in accounts receivable driven primarily by customer payments, partially offset by a $308 million increase in prepaid expenses and other assets primarily by prepayments of supply agreements.
Previous wording
Net cash provided by operating activities was $1.7 billion in the nine months ended September 28, 2024, primarily due to our net income of $1.2 billion, adjusted for non-cash and non-operating charges of $2.6 billion and net cash outflows of $2.0 billion from changes in our operating assets and liabilities. The primary drivers of the change in operating assets and liabilities were a $1.9 billion increase in accounts receivable due to the timing of customer payments and higher revenue, a $1.1 billion increase in inventory primarily to support the continued ramp of Data Center products in advanced process technology nodes and $1.0 billion of tax payments.
Current 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 $700 million 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.
Previous wording
Net cash used in investing activities of continuing operations was $4.0 billion for the nine months ended September 27, 2025, which primarily consisted of cash used in acquisitions, net of cash acquired, of $1.7 billion, the purchases of short-term investments of $2.1 billion, purchases of property and equipment of $752 million, and purchases of strategic investments of $432 million, partially offset by $1.0 billion 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 $30 million due to purchases of equipment.
Current wording
Net cash used in investing activities of continuing operations was $2.6 billion for the three months ended March 28, 2026, which primarily consisted of purchases of short-term investments of $2.5 billion, purchases of property and equipment of $389 million, and purchases of long-term investments of $409 million, partially offset by $778 million of proceeds from the maturity and sale of short-term investments.
Previous wording
Net cash provided by investing activities was $113 million for the nine months ended September 28, 2024 which primarily consisted of $1.9 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 $707 million, cash used in acquisitions, net of cash acquired of $548 million, and purchases of property and equipment of $428 million.
Current 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.
Previous wording
Net cash used in financing activities was $1.9 billion for the nine months ended September 28, 2024, which primarily consisted of repayment of the 2.95% Notes Due 2024 of $750 million, stock repurchases for tax withholding on employee equity plans of $686 million, and common stock repurchases of $606 million.
Current wording
Net cash used in financing activities of continuing operations was $350 million for the three months ended March 28, 2026, which primarily consisted of stock repurchases of $221 million and stock repurchases for tax withholding on employee equity plans of $134 million.
Previous wording
Net cash used in financing activities of continuing operations was $103 million for the nine months ended September 27, 2025, which primarily consisted of stock repurchases of $1.3 billion and stock repurchases for tax withholding on employee equity plans of $447 million partially offset by cash received from the issuance of senior notes of $1.5 billion. There was no net cash provided by financing activities of discontinued operations for the nine months ended September 27, 2025.
Current 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.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
For the three months ended March 29, 2025, we recorded an income tax provision from continuing operations 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.