AMD reported Q2 2026 after the close on August 4. Revenue was $11,536M, up 50.1% year over year — the first fifty-percent growth quarter since 2022 Q2 — and GAAP diluted EPS was $1.38 against $0.54 a year ago.
Three days earlier we previewed the print and argued that the flat sequential revenue line everyone was about to lead with was a seasonal artifact, and that the question actually worth carrying in was narrower: gross margin had turned down while cash conversion turned up. Both halves of that came back, and the cash half came back badly.
The four things we said to watch
| What we said to watch | What the print says |
|---|---|
| Was Q4's 54.00% gross margin the peak, or was Q1's give-back a mix effect that reverses? | Mostly reversed, not fully. 53.77%, recovering 0.95 of the 1.18 points lost — Q4 2025 keeps the record. |
| Whether FCF margin holds above the low twenties | No. 13.51%, the lowest in five quarters, on capex that doubled. |
| Data-center growth against a supply-constrained market | $6,718M, up 107%, and 58% of total revenue. |
| The sequential line, read against AMD's seasonality | +12.5%, against +3.3% and +6.6% in the last two Q2s. |
Three of the four landed at or above what the record implied. The one that did not is the cash half of the metric this site is named after.
The quarter in the house series
| Quarter | Revenue | FCF | FCF margin | Gross margin | Diluted EPS | Revenue YoY |
|---|---|---|---|---|---|---|
| 2025 Q2 | $7,685M | $1,729M | 22.5% | 49.00% | $0.54 | +31.7% |
| 2025 Q3 | $9,246M | $1,901M | 20.6% | 50.00% | $0.75 | +35.6% |
| 2025 Q4 | $10,270M | $2,378M | 23.2% | 54.00% | $0.92 | +34.1% |
| 2026 Q1 | $10,253M | $2,566M | 25.0% | 52.82% | $0.85 | +37.8% |
| 2026 Q2 | $11,536M | $1,558M | 13.5% | 53.77% | $1.38 | +50.1% |
The Rule of 40, recomputed
AMD's Rule of 40 score for Q2 2026 is 63.62 — 50.11 of revenue growth plus 13.51 of free-cash-flow margin. Last quarter it was 62.87, from 37.85 plus 25.03.
A 0.75-point improvement reads like a quarter where nothing happened. What actually happened is that twelve points of growth replaced eleven and a half points of cash margin, and the score barely noticed. That is the metric working as designed and also the reason it should never be read alone: a company converting a quarter of its revenue to cash at 38% growth and one converting an eighth of it at 50% growth are different businesses with the same score.
On a trailing-twelve-month basis — $41,305M of revenue, up 39.54%, and $8,403M of free cash flow, a 20.34% margin — the score is 59.89. The TTM view still carries three quarters of the old composition, which is exactly why it moved less.
Where the cash went
Operating cash flow was $2,366M, down from $2,955M in Q1, in a quarter when revenue rose $1,283M. Capital expenditure was $808M against $389M — it more than doubled. Both directions are unusual for AMD, whose capex sat between $222M and $389M for the previous four quarters.
Our free-cash-flow figure and AMD's agree exactly this quarter: the company reports free cash flow of $1,558M on the same operating-cash-flow-minus-purchases-of-property-and-equipment definition the house uses on every company on this site. That is worth stating plainly because it is rare — we have spent much of this earnings season explaining why our number differs from Meta's and Grab's. Here there is nothing to reconcile.
What the release does not settle is whether the capex step is a level or a spike. AMD is ramping Helios rack-scale systems and the MI400 series into deployments at Anthropic, Microsoft, Oracle and OpenAI; a company standing up that kind of supply commitment spends ahead of the revenue. If $808M is the new run rate and revenue grows into it, the FCF margin recovers on its own. If the ramp needs more, the cash half of the score stays compressed through the guidance quarter.
The EPS line has a passenger
GAAP net income was $2,297M and diluted EPS $1.38. Inside that sits $483M of net gains on long-term investments — about $0.29 a share — which AMD's own non-GAAP reconciliation strips out. Non-GAAP EPS was $1.66, against a Street consensus of $1.62.
This site stores GAAP diluted EPS, so $1.38 is what the series carries and what our trailing-twelve-month EPS of $3.90 is built from. Read the beat and the GAAP line as answering different questions: the operating quarter is the $3,094M of non-GAAP operating income, and roughly a fifth of the reported GAAP earnings growth this quarter came from marking up investments rather than from selling chips.
Segments
- Data Center $6,718M, up 107% year over year — 58% of company revenue, from 42% a year ago.
- Client $3,062M, up 23%.
- Gaming $779M, down 31%, on lower semi-custom revenue.
- Embedded $977M, up 19%.
The data-center number is the one that answers the Intel read-across we raised in the preview. Intel described demand outpacing supply in its own server business; AMD doubling data-center revenue in the same market is consistent with that rather than in tension with it. A supply-constrained market lets both suppliers grow, and neither print tells you anything reliable about share.
Guidance
AMD guided Q3 2026 revenue to approximately $13.0B ± $300M — about 41% year-over-year growth and 13% sequentially — with non-GAAP gross margin of approximately 56%, unchanged from the quarter just reported. The midpoint sits above the roughly $12.5B the Street was carrying.
Note what that guide does to the growth half of the score if it lands: 41% against 50.1% is a deceleration, entirely because the comparison base gets harder. For the Q3 score to hold near 63, the cash half has to come back.
The bottom line
The preview said the flat quarter was being read on the wrong axis, and the print bore that out — AMD followed a 0.2% sequential decline with a 12.5% increase and its fastest year-over-year growth since 2022. The gross-margin question resolved in the direction we said was answerable: 53.77% recovers most of the give-back without reclaiming Q4's record.
The unresolved half is new. AMD's Rule of 40 score is essentially unchanged, and the two quarters behind it look nothing alike. Q3 will show whether $808M of capex was a step or a spike — and that, not the revenue line, is where this score is now decided.
AMD figures are from the company's Q2 2026 earnings press release, filed August 4, 2026 as Exhibit 99.1 to an 8-K (accession 0000002488-26-000121), captured in our release notes: revenue $11,536M, gross profit $6,203M, GAAP net income $2,297M, GAAP diluted EPS $1.38, non-GAAP diluted EPS $1.66, operating cash flow $2,366M, purchases of property and equipment $808M, and Q3 guidance of ~$13.0B ± $300M. Prior quarters are from our stored AMD series. Free-cash-flow margin and Rule of 40 are computed on the house definition in our Rule of 40 explainer — free cash flow as operating cash flow minus capital expenditure — which for this quarter equals AMD's own reported figure. The $1.62 consensus EPS figure is the Street number reported alongside the print, not a value stored in this repo.