The quarter against our forecast
Q3 2026 line by line, as the income statement shows it
| Line | Outlook | Our forecast | Reported | Against our forecast |
|---|---|---|---|---|
| Net revenue | — | $13.2B | $13.4B | +1.3%beat |
| Sales growth, year on year | — | 42.8% | 44.7% | +1.9 ptbeat |
| Operating Segments | ||||
| Data Center | — | $8.33B | $8.55B | +2.6%beat |
| Client and Gaming | — | $3.76B | $3.72B | −1.0%miss |
| Embedded | — | $1.11B | $1.11B | −0.1%miss |
| Cost of sales | — | $5.79B | $5.91B | +2.0%miss |
| Amortization of acquisition-related intangibles | — | $260M | $257M | −1.2%beat |
| Total cost of sales | — | $6.05B | $6.17B | +1.9%miss |
| Gross profit | — | $7.15B | $7.21B | +0.9%beat |
| Gross margin | — | 54.1% | 53.9% | −0.2 ptmiss |
| Research and development | — | $2.75B | $2.80B | +1.9%miss |
| Marketing, general and administrative | — | $1.48B | $1.30B | −12.3%beat |
| Amortization of acquisition-related intangibles | — | $276M | $277M | +0.4%miss |
| Total operating expenses | — | $4.51B | $4.38B | −2.9%beat |
| Operating income (loss) | — | $2.64B | $2.83B | +7.4%beat |
| Operating margin | — | 20.0% | 21.2% | +1.2 ptbeat |
| Interest expense | — | $63.0M | $62.0M | −1.6%beat |
| Other income (expense), net | — | $108M | −$902M | −935.2%miss |
| Income (loss) from continuing operations before income taxes and equity income | — | $2.68B | $1.87B | −30.4%miss |
| Income tax provision (benefit) | — | $311M | −$555M | −278.5%beat |
| Tax rate | — | 11.6% | −29.7% | −41.3 ptbeat |
| Equity income in investee | — | $6.0M | $5.0M | −16.7%miss |
| Income from continuing operations, net of tax | — | $2.38B | $2.43B | +2.1%beat |
| Income (loss) from discontinued operations, net of tax | — | $0.0M | $0.0M | —miss |
| Net income | — | $2.38B | $2.43B | +2.1%beat |
| Diluted | — | 1.66B | 1.66B | +0.00Bin line |
| Adjusted EPS | — | $1.98 | $2.09 | +11¢beat |
Our forecast was frozen before the release: the middle forecast of 7 analysts as of 2026-11-03 04:20:15 ET. Each reported number is quoted from the release; the 10-Q's tagged facts confirm the statement's lines when it is filed. Read before our lock: the SEC lists the release in its index that night, and the next check confirms its bytes. A cost above our forecast is a miss.
Why the quarter differed from our forecast
Operating income (loss)+7.4%
What we assumedForecasts set third-quarter non-GAAP operating expenses at or slightly above the company's August guide.adjusted operating expenses of $3.7 billion, modestly above management's $3.65 billion outlook
Analyst G
What the company printedNon-GAAP operating expenses came in below the guide, with marketing and administrative spending falling from the second quarter.Non-GAAP operating expenses $ 3,560 $ 3,394 $ 2,754
Known before our cutoff?No: Searched company talks after the August call for operating expenses; nothing updated the third-quarter spending guide.
Net income+2.1%
What we assumedForecasts kept the customer warrants out of the quarter, assuming no vesting and no effect on results.OpenAI and Meta warrants are excluded from forecast diluted shares until vesting and exercise become likely.
Analyst E
What the company printedA warrant liability charge hit other expense, offset by a large tax benefit, so GAAP net income landed near forecast.Change in fair value of warrant liability (3) 1,097 0.66 — — — —
Known before our cutoff?Yes: The second-quarter 10-Q said the warrants are carried as liabilities until equity conditions are met.The warrants will be classified as liabilities until certain conditions for equity classification are met.
Net revenue+1.3%
What we assumedForecasts gave Helios only a small third-quarter contribution, beating the guide mainly on servers and MI355.Only a small Helios contribution in the third quarter; most of the beat comes from server and MI355.
Analyst F
What the company printedData Center hit a record on EPYC demand and the MI450 launch, lifting revenue above forecast.•Data Center segment revenue was a record $8.5 billion, up 97% year-over-year, driven by strong demand for AMD EPYC™ processors and the launch of AMD Instinct™ MI450 Series GPUs.
Known before our cutoff?Yes: October OCP keynote said Helios production shipments began in September at five lead customers.But I'm very happy to say that Helios is in production today. We started shipping production in September. The first systems are installed at our leading customers, OpenAI, Meta, Microsoft, Oracle, Anthropic.
Gross profit+0.9%
No line written.
The company's new outlook
For the fourth quarter of 2026, AMD expects revenue to be approximately $17 billion, plus or minus 3%. The mid-point of the revenue range represents year-over-year growth of approximately 66% and a sequential increase of approximately 27%. Non-GAAP gross margin is expected to be approximately 55%.
For the fourth quarter of 2026, AMD expects revenue to be approximately $17 billion, plus or minus 3%. The mid-point of the revenue range represents year-over-year growth of approximately 66% and a sequential increase of approximately 27%. Non-GAAP gross margin is expected to be approximately 55%.
For the fourth quarter of 2026, AMD expects revenue to be approximately $17 billion, plus or minus 3%. The mid-point of the revenue range represents year-over-year growth of approximately 66% and a sequential increase of approximately 27%. Non-GAAP gross margin is expected to be approximately 55%.
For the fourth quarter of 2026, AMD expects revenue to be approximately $17 billion, plus or minus 3%. The mid-point of the revenue range represents year-over-year growth of approximately 66% and a sequential increase of approximately 27%. Non-GAAP gross margin is expected to be approximately 55%.
Each item as the release prints it. Our forecast stands beside an item only when the item is one of our two numbers, for our quarter or year, in our unit.
The company's reasons, from the release
- Record quarter, Data Center growth “AMD delivers record quarter as Data Center segment revenue grows 97% year-over-year, driven by record sales of AMD Instinct GPUs and AMD EPYC CPUs”
- Data Center segment revenue increase “•Data Center segment revenue was a record $8.5 billion, up 97% year-over-year, driven by strong demand for AMD EPYC™ processors and the launch of AMD Instinct™ MI450 Series GPUs.”
- Client up, Gaming down “•Client and Gaming segment revenue was $3.7 billion, down 8% year-over-year. Client business revenue was $2.9 billion, up 7% year-over-year, driven by sales of AMD Ryzen™ mobile processors. Gaming business revenue was $773 million, down 40% year-over-year, due to lower semi-custom and graphics revenue.”
- Embedded segment revenue increase “•Embedded segment revenue was $1.1 billion, up 29% year-over-year, led by growth in aerospace and defense, automotive, communications and industrial end markets.”
- EPS growth from operating leverage ““Third quarter revenue grew 45% year-over-year to a record $13.4 billion, while non-GAAP earnings per share grew 74%, demonstrating the significant operating leverage in our business model as our Data Center business drives scale,” said Jean Hu, AMD executive vice president, chief financial officer and treasurer. “Our fourth-quarter outlook reflects accelerating revenue and earnings growth, driven by strong demand across our Data Center portfolio.””