AMD kicked off 2025 with a strong first quarter, delivering robust revenue growth, significant margin expansion, and record profitability, underscored by sustained momentum in its Data Center and Client segments. Revenue rose 36% year-over-year to $7.44 billion, while GAAP gross margin expanded to 50%, up from 47% a year ago. Profitability saw a marked improvement, with GAAP operating income surging to $806 million from just $36 million, and net income reaching $709 million, up from $123 million. Diluted EPS grew sixfold to $0.44, and free cash flow came in at $727 million, with $7.3 billion in cash and equivalents on hand at quarter-end.

On a non-GAAP basis, AMD delivered even stronger results, with gross margin at 54%, and operating income climbing 57% to $1.78 billion. Net income jumped 55% to $1.57 billion, and EPS rose to $0.96, reflecting increased scale and margin leverage.

The Data Center segment led the charge, generating $3.67 billion in revenue, up 57% year-over-year, driven by high demand for AMD EPYC™ CPUs and Instinct™ GPUs. Operating income grew to $932 million, up from $541 million. The Client business also delivered standout performance, with revenue up 68% to $2.29 billion, fueled by strong adoption of "Zen 5" Ryzen™ processors. While Gaming revenue declined 30% to $647 million due to lower semi-custom demand, the broader Client and Gaming group still grew revenue by 28% to $2.94 billion, and operating income more than doubled to $496 million.

The Embedded segment saw a modest decline, with revenue down 3% to $823 million, and operating income slipping to $328 million from $342 million, amid mixed end-market dynamics.

Strategically, AMD closed its $3.375 billion acquisition of ZT Systems to bolster AI infrastructure capabilities and is exploring a strategic partner for its manufacturing arm. The company also completed a global restructuring, reducing headcount by about 4%, and recorded $186 million in related charges. Looking ahead, AMD expects to face a $800 million charge in Q2 2025 due to new U.S. export controls on certain AI products. However, this will be partly offset by a $900 million tax benefit following IRS relief approval.

For Q2 2025, AMD guides for revenue of approximately $7.4 billion, plus or minus $300 million. Non-GAAP gross margin is expected at 43%, inclusive of the export-related charge; excluding it, the margin would be about 54%.

CEO Dr. Lisa Su emphasized AMD’s sustained momentum and execution despite regulatory headwinds, noting the company's position for strong growth throughout 2025. CFO Jean Hu highlighted the leverage achieved as AMD scales, reinforcing continued investment in innovation and long-term value creation.

With 66% of Q1 revenue derived from international markets, $212 million in capital expenditures, and $749 million returned to shareholders, AMD enters the rest of the year with solid financial footing and clear strategic focus.