Company DCF analysis file
AMD DCF Analysis
An AMD DCF must connect its data-center, client/gaming and embedded demand to product costs, development and supply funding. FY2025 continuing cash improved, but the consolidated cash total includes a discontinued business. Preserve that distinction before forecasting a recurring cash stream.
Revenue, expenses and profit on one annual basis
Historical AMD consolidated comparison, $ millions: FY2024 ended 2024-12-28 and FY2025 ended 2025-12-27. These annual periods are separate from the later interim observation below.
| Measure | FY2024 | FY2025 |
|---|---|---|
| Revenue | 25,785 | 34,639 |
| Total cost of sales, including acquisition amortization | 13,060 | 17,487 |
| Research and development | 6,456 | 8,091 |
| Marketing, general and administrative | 2,735 | 4,144 |
| Acquisition amortization in operating expenses | 1,448 | 1,223 |
| Restructuring | 186 | 0 |
| Operating income | 1,900 | 3,694 |
| Continuing net income | 1,641 | 4,269 |
| Consolidated net income | 1,641 | 4,335 |
Source: Annual financial statements. Annual values are reported unless a row is marked derived.
Acquisition amortization appears in both cost of sales and operating expenses. The two rows represent different allocations; neither is a current purchase payment. Reconcile them before using an adjusted margin. Continuing net income and consolidated net income also differ, so a forecast should not mix their populations with a continuing-only investment deduction.
Use the comparable three-segment presentation
| Reported sales, $ millions | FY2024 recast | FY2025 |
|---|---|---|
| Data Center | 12,579 | 16,635 |
| Client and Gaming combined | 9,649 | 14,550 |
| Embedded | 3,557 | 3,454 |
Source: Annual business disclosures and financial notes. Annual values are reported unless a row is marked derived.
The combined Client and Gaming comparative is the FY2025 reporting presentation, not the sum of two differently dated forecasts. Give server, personal-computing and embedded design cycles their own revenue and inventory assumptions. Segment sales do not disclose segment cash collections.
Reconcile reported cash before forecasting investor cash
| Measure | FY2024 | FY2025 |
|---|---|---|
| Continuing operating cash | 3,041 | 6,493 |
| Continuing property purchases | 636 | 974 |
| Continuing free cash flow: derived | 2,405 | 5,519 |
| 2025 discontinued operating cash | Not used in this bridge | 1,216 |
Source: Annual cash-flow statement and related notes. Annual values are reported unless a row is marked derived.
The consistent 2025 subtraction is 6,493 minus 974 = $5,519 million. Adding discontinued operating cash and deducting only continuing capex would overstate this measure. Supply commitments can already enter purchases and working capital; do not deduct the same committed inventory twice.
The later interim period stays separate
| Observation | Period-specific evidence |
|---|---|
| Reported interim basis | Q2 2026 covers 2026-03-29 through 2026-06-27 and was released 2026-08-04. Revenue was $11,536 million in this quarter. |
| Interpretation boundary | Compare the quarter with its own prior-year quarter, which included an export-related inventory charge. The annual continuing-cash definition above is narrower than total operating cash including discontinued operations, and the Client/Gaming presentation must remain consistent. |
Source: official interim reporting. The dated quarter is not annualized here and is not added to either full-year column. Later reporting must be checked before refreshing the valuation date.
Turn the statements into a DCF operating case
Start with continuing operating profit, operating taxes and development costs. Add back noncash amortization only once, then fund the inventory, packaging and supplier payments required by each product case. Acquisitions have separate purchase and consolidation dates. A forecast also needs a consistent compensation/dilution policy, not a noncash add-back paired with permanently fixed shares.
| Driver | Evidence to carry into the forecast | Downside condition to test |
|---|---|---|
| Data Center demand | Paid product shipments and product cost | Supplier cash stays committed while sell-through slows |
| Client/Gaming mix | Comparable combined sales and inventory | A favorable mix is assumed to guarantee collections |
| Embedded cycle | Design wins, replacement demand and development | Long qualification cycles delay the return on research |
Stress later customer collections with near-term supply payments unchanged. Compare that funding case with a documented ability to reschedule orders. Keep the export-charge qualification attached to the later quarter; its prior-year comparison cannot establish an automatic recurring-margin uplift.
Use the AMD financial analysis for the broader operating context, the company forecast to state the operating assumptions, and the DCF calculator only after defining the investor cash stream. Keep the statement definitions, reporting dates and your own assumptions visible when comparing valuation cases.
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