AMD posts record $7.685 billion revenue despite massive inventory charge — $800 million MI308 write-off not enough to stop biggest ever quarter

AMD on Tuesday published its financial results for the second quarter of its fiscal 2025, posting revenue of $7.685 billion, which is its highest quarterly revenue ever. The company's results were driven by a significant uptick in client CPU sales and strong sales of its data center processors. But at the same time, the company's results were partially offset by the $800 million hit from Instinct MI308 GPU export restrictions to China.

AMD's revenue for Q2 FY2025 reached $7.685 billion, marking a 32% year-over-year (YoY) and 3% quarter-over-quarter (QoQ) increase. The company's net income totaled $872 million, up 229% compared to the same quarter a year ago, and 23% sequentially. However, as a consequence of the $800 million writeoff, AMD's gross margin dropped to 40%, down from 49% YoY and from 50% QoQ.

(Image credit: AMD)

(Image credit: AMD)

"We delivered strong revenue growth in the second quarter led by record server and PC processor sales," said Dr. Lisa Su, AMD Chair and CEO. "We are seeing robust demand across our computing and AI product portfolio and are well positioned to deliver significant growth in the second half of the year, driven by the ramp of our AMD Instinct MI350 series accelerators and ongoing EPYC and Ryzen processor share gains."

Strong results across all product segments

In Q2 2025, AMD's Client and Gaming division achieved a record $3.621 billion in revenue, marking a massive 69% year-over-year increase and significantly contributing to the company's overall growth.

The Client segment alone delivered $2.5 billion in revenue, driven by strong demand for AMD's latest Ryzen processors based on the Zen 5 microarchitecture and a richer product mix.

The Gaming segment also saw a 73% revenue increase compared to the same quarter of 2024, reaching $1.12 billion. This growth was fueled by higher shipments of semi-custom SoCs used in game consoles and strong demand for Radeon RX 9000-series GPUs for gamers and AI applications.

Combined, factors like favourable CPU product mix, increased demand for graphics cards, and rising demand for console processors led to a sharp YoY rise in operating income for the division, up 362% year-over-year to $767 million.

As for AMD's Data Center division, it generated $3.24 billion in revenue, growing 14% year-over-year despite significant headwinds.

The growth was primarily driven by strong demand for AMD EPYC CPUs as AMD gained share across both cloud and enterprise markets. However, the division's profitability was severely impacted by $800 million in inventory and related charges due to U.S. export restrictions on the Instinct MI308 AI accelerator, resulting in an operating loss of $155 million, compared to $743 million in income a year ago. Excluding this charge, the business would have remained profitable.

AMD's Embedded division posted revenue of $824 million, down 4% YoY and flat sequentially.

The decline was attributed to mixed demand across end markets, macroeconomic softness, and variability in customer ordering patterns, according to the company. Operating income for the Embedded segment was $275 million, a 20% decrease compared to the same quarter last year.

Optimistic forecast

For Q3 2025, AMD expects revenue of approximately $8.7 billion ± $300 million, representing around 28% year-over-year and 13% sequential growth at the midpoint, and another record quarter for AMD.

This outlook reflects strong demand for AMD's AI accelerators as the company expects its Instinct MI350-series to ramp in Q3, EPYC server processors, and client products due to start of the back-to-school season and stockpiling for the upcoming Christmas season, though it excludes any potential revenue from Instinct MI308 GPU shipments to China, as export license applications remain under U.S. government review. While Q3 is traditionally good for AMD's gaming segment as console makers Microsoft and Sony increase purchases of SoCs for their products, this time around, AMD expects flattish revenue.

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