A：The highlights of AMD's fourth quarter and full year 2025 financial results include record revenue, net income, and free cash flow driven by broad-based demand for high-performance computing and AI products. Demand accelerated across data centers, PCs, and embedded markets, with the launch of the broadest set of leadership products in history, gains in server and PC processor share, and rapid scaling of the data center AI business.

A：Recent achievements in AMD's data center segment include a year-over-year revenue increase of 50% to $5.4 billion, accelerated deployments of the Instinct Mi 350 series GPUs, and gains in server market share with the 5th gen Epic CPUs. Additionally, the company had robust sales of fourth-generation Epic CPUs, with significant public cloud offerings growth and deployments by hyperscalers and enterprises.

A：The shift in EPIC adoption is reflected in the market with a doubling of large businesses deploying EPIC on-premises, record server sales, and strong demand from hyperscalers and enterprises. Cloud providers are launching more instances, with significant growth in public cloud offerings, and the number of AI workload production cases using Instinct CPUs expanded to 8 of the top 10.

A：AMD expects strong server CPU demand going forward with hyperscalers expanding their infrastructure for cloud services and AI, and enterprises modernizing their data centers for AI workflows. The company believes Epic has become the processor of choice for the modern data center, offering leadership in performance, efficiency, and total cost of ownership (TCO). The launch of the next-generation Venice CPU is anticipated to further extend this leadership.

A：In the fourth quarter, AMD set a record for Instinct CPU revenue, driven by the ramp of the Mi 350 series shipments and some revenue from the Mi 308 sales. The adoption of Instinct broadened with 8 of the top 10 using it for production workloads, and the company announced strategic partnerships and initiatives to support the next phase of Instinct adoption.

A：The strategic partnership with Tata Consultancy Services is aimed at co-developing industry-specific AI solutions to help customers deploy AI across their operations. This partnership is expected to contribute to the deployment of AI solutions and further expand the use of AMD's technology in business operations.

A：The next generation of Instinct CPUs, powered by the CDNA 6 architecture and built on an advanced 5nm process technology, is expected to deliver another major leap in AI performance. These CPUs will feature high-speed HBM4 memory and are anticipated to support the development of large-scale multimodal models. The launch of Mi 400 is expected later in the year, alongside the strategic partnership with OpenAI for deploying substantial AI capabilities.

A：Semi custom SOC revenue is expected to decline by a significant double-digit percentage as the company enters the seventh year of a very strong console cycle. The decline is anticipated to be affected by the launch of the Valve Steam machine early in the year and development progress on Microsoft's next-gen Xbox, featuring an AMD semi custom SOC, which is expected to support a launch in 2027.

A：In the embedded segment, revenue increased 3% year over year to $950 million, led by strength with testers and measurements and aerospace customers. There was a growing adoption of embedded Xs CPUs, with channel sell-through acceleration across end markets, including test measurement and emulation design. Record design wins were closed, totaling $17 billion in 2025, up nearly 20% year over year. New products were launched, such as AI Edge Gen 2 SoCs for low latency inference workloads and Spartan Ultra scale plus devices for cost-optimized applications.

A：AMD is well positioned to capture growth in high performance and AI computing, which is entering a multi-year demand super cycle. The company has highly differentiated products, a proven execution track record, deep customer partnerships, and significant operational scale. With the breadth of solutions and partnerships required for end-to-end leadership, AMD is set to grow across all segments, with increased adoption of EPYC and Instinct, continued client share gains, and a return to growth in the embedded segment.

A：For the fourth quarter of 2025, AMD delivered record revenue of $10.3 billion, up 34% year over year, and gross margin of 57%, up 290 basis points year over year. Record earnings per share of $1.53 were reported, reflecting strong execution and operating leverage in the business model. For the fiscal year, record revenue of $34.6 billion was reported, with a gross margin of 52%. The company expects significant top line and bottom line growth in 2027, driven by increased adoption of EPYC and Instinct, continued client share gains, and a return to growth in the embedded segment.

A：The embedded segment revenue was 950 million, up 3% year over year and 11% sequentially. The embedded segment's operating income was 357 million, or 38% of revenue, compared to 362 million, or 39% of revenue, in the previous year.

A：The first quarter of 2026 is expected to have revenue of approximately $9.8 billion, plus or minus $300 million, including about $100 million in sales to China. At the midpoint of the guidance, revenue is expected to be up 32% year over year, driven by growth in the data center and client and gaming segments. Fourth quarter non-GAAP gross margin is expected to be approximately 65%, with non-GAAP operating expense at about $3.05 billion, non-GAAP other net income at about $35 million, and a non-GAAP effective tax rate of 13%. Diluted share count is expected to be approximately 1.65 billion shares.

A：The company is very happy with the progress of the Mi 450 series development and is on track for a second half launch. Customer engagements are proceeding well, with a strong relationship with OpenAI and plans for a ramp starting in the second half of the year into 2027. The company is also working closely with other customers interested in quickly ramping Mi 10, given its strength across inference and training. They feel very good about data center growth prospects in 2026 and beyond, with potential for tens of billions of dollars of data center AI revenue.

A：The Mi 450 is positioned as an inflection point for the company in 2026, with revenue expected to start in the third quarter and to ramp up significantly in the fourth quarter. The company has multiple variants of the Mi 450 series, with the majority being rack scale solutions. Revenue will be recognized when shipped to the rack builder.

A：The company is very bullish about data center revenue, with the expectation of growing by more than 60% in 2026. This growth will be supported by various CPU products such as Epic (Turin and Genoa), and the Mi 450 ramp. The long-term target of greater than 60% growth is considered possible in 2026.

A：The server CPU market is expected to grow in strong double digits in 2026 due to the relationship between CPU demand and the overall AI ramp. The company has increased its supply capacity for server CPUs and is working with supply chain partners to further address the strong demand.

A：The company's improved gross margins are attributed to a very favorable product mix across all business segments. In the data center, the ramp of new products like the I 355 is helping to increase gross margin in client business. The company is also gaining momentum in its commercial business and seeing the recovery of its embedded business, which is margin accretive.

A：The company is managing the risks associated with transitioning the Mi 450 from silicon to racks by conducting extensive testing at the rack scale level and the silicon level. This includes input from customers to ensure parallel testing. The company's expectation is to remain on track for their second half launch.

A：The rapid increase in Opex is tied to the belief that it should grow slower than revenue. It is seen as an appropriate investment, especially as revenue increases and with the expectation of seeing leverage in Opex growth in 2026, particularly in the second half of the year when there is an inflection in revenue.

A：The inventory reserve reversal in Q4, which amounted to $360 million and was associated with Q4 revenue and the expected $100 million revenue in Q1, resulted in a very clean Q1 gross margin guide.

A：Although the company does not provide AI numbers at the business level, the guide suggests that even if the Q4 China number is not recurring, growth from Q1 to Q2 would still be visible. This indicates positive momentum for AI revenue growth.

A：The client market has performed extremely well in 2025 with strong growth in ASP and unit growth. While the PC market is showing some signs of a decrease due to inflationary pressures, the company expects its PC business to grow in the second half of the year. The focus is on the enterprise segment, where there has been significant progress in 2025 and continued growth is expected in 2026.

A：The competitive implications are viewed as positive as the AI market matures. As inference demand increases, the efficiency of the inference stack becomes more important. The company's triple architecture allows optimization across inference, training, and different stages of inference, positioning it well for future workload-optimized products.

A：The timeline for the 6 GW ramp is on track, scheduled to start in the second half of the year. The company is working in partnership with OpenAI and CSP partners to deliver the Mi LoR series and ramp production. While there is optimism about the Mi 450 ramp for OpenAI, the company is also working with other customers to ramp the series in the same time frame.

A：There is a high demand for high-performance x86 CPUs for AI processes and agents that involve a lot of traditional CPU tasks. The majority of these tasks are currently using x86 technology. However, the competitive dynamic with x86 and Nvidia's offerings in the server CPU market is highlighted as an area of interest, especially considering the competitor's plans to release an Arm CPU in the second half.

A：Epic is characterized by optimized workload distribution, providing the best cloud and enterprise processors, along with lower-cost variants for storage and other elements. It contributes to AI infrastructure by being highly optimized for all workloads and continuing to expand its footprint with customer collaboration.

A：HBM procurement affects Epic's supply chain and product development through long-term collaboration with suppliers based on forecasted demand and development needs. Epic's supply chain is well-positioned due to extensive planning for the ramp in both CPU and GPU business over the past couple of years and is further secured by multi-year agreements that extend beyond current supply chain tensions.

A：The company plans to follow competitors in terms of architectural changes for its system accelerators to some extent. With a flexible architecture, they aim to provide different system solutions catering to varied requirements, including high-end applications and enterprise AI, which necessitates a range of form factors and investment across the spectrum.

A：Each new generation of products typically provides more capabilities and memory, which should result in an improved gross margin. Initially, during the ramp phase, gross margins tend to be lower, but as production scales and performance improves, there is growth margin improvement within each generation. In the long term, each new generation should have a higher gross margin than the previous one.

A：The gaming segment is expected to significantly impact revenue in 2026 with a substantial double-digit decline. This follows a period of growth, and while the new generation is anticipated to ramp in 2027, the short-term outlook is for a decrease in revenue.

A：There are no concerns regarding supply constraints affecting the ramp in the second half of the year. The company is planning the ramp at every component level, and supply is not expected to limit the data center AI ramp. The priority is ensuring that data center ramps go well, including for AI and CPUs, with an aggressive and doable ramp plan in place.

A：The largest investments in 2025 are focused on data center AI, accelerating the hardware roadmap, expanding software capabilities, acquiring Z T systems for system-level solutions and capabilities, and investing in go-to-market expansion to support revenue growth and commercial and enterprise business growth for CPUs. In 2026, the company expects to continue investing aggressively, with a focus on revenue expansion outpacing operating expense increase to drive earnings per share expansion.