Revenue of $1.44 billion, increased 3 percent sequentially and 24 percent year-over-year

Gross margin of 35 percent

Operating income of $63 million and non-GAAP⁽¹⁾ operating income of $67 million

Net loss of $36 million, loss per share of $0.05 and non-GAAP⁽¹⁾ net income of $17 million, earnings per share of $0.02

Revenue

Operating income (loss)

Net loss / Loss per share

Revenue

Operating income (loss)

Net income (loss) / Earnings (loss) per share

Gross margin was 35 percent in Q2 2014.

Gross margin was flat sequentially.

Cash, cash equivalents and marketable securities were $948 million at the end of the quarter, significantly higher than the target minimum of $600 million and close to the optimal zone of $1 billion.

Total debt at the end of the quarter was $2.21 billion, an increase from $2.14 billion at the end of Q1 2014.

During Q2 2014, the company continued re-profiling its near-term debt maturities, issuing $500 million in aggregate principal amount of 7.00% Senior Notes due 2024 and repurchasing all $452 million aggregate principal amount of the company’s outstanding 8.125% Senior Notes due 2017.

Computing Solutions segment revenue increased 1 percent sequentially and decreased 20 percent year-over-year. The year-over-year decline was due to decreased microprocessor unit shipments.

Operating income was $9 million, an improvement from an operating loss of $3 million in Q1 2014 and operating income of $2 million in Q2 2013. The sequential increase was primarily driven by improved gross margin due to a richer mix of notebook products while the year-over-year increase was primarily driven by lower operating expenses.

Microprocessor average selling price (ASP) increased sequentially and year-over-year.

Graphics and Visual Solutions segment revenue increased 5 percent sequentially and 141 percent year-over-year driven largely by increased semi-custom SoC shipments. Graphics processor unit (GPU) revenue decreased sequentially and year-over-year, primarily due to a decrease in AIB channel sales, partially offset by increased sales of professional graphics and desktop OEM GPUs.

Operating income was $82 million compared with $91 million in Q1 2014 and breakeven in Q2 2013. The sequential decline was primarily due to lower GPU revenue, while the year-over-year increase was driven by increased sales of semi-custom SoCs.

GPU ASP decreased sequentially and year-over-year, primarily driven by lower AIB channel sales.

AMD unveiled further details on its ambidextrous computing roadmap, including a 64-bit ARM architecture license and plans to develop custom high-performance ARM and x86 processor cores for 2016. The company’s differentiated x86 and ARM strategy is designed to deliver unmatched computing and graphics performance using a shared, flexible infrastructure to drive new innovations.

AMD appointed Dr. Lisa Su to Chief Operating Officer, responsible for overseeing the company’s previously separate global operations, operating segments and sales organization to drive growth in both traditional PC and adjacent markets.

AMD realigned its organization structure to deliver unmatched customer value in both traditional PC markets and adjacent high-growth markets. Effective July 1, 2014, AMD’s two new reportable segments are as follows:

Computing and Graphics segment, which will primarily include desktop and notebook processors and chipsets, discrete GPUs and professional graphics;

Enterprise, Embedded and Semi-Custom segment, which will primarily include server and embedded processors, dense servers, semi-custom SoC products, development services and technology for game consoles.

AMD’s Quarterly Report on Form 10-Q for the quarter ended September 27, 2014 will reflect this new segment reporting structure.

AMD detailed its plans to accelerate the energy efficiency of its accelerated processing units (APUs) delivering 25x efficiency improvements by 2020 through design optimizations, intelligent power management and Heterogeneous System Architecture advances that are expected to enable AMD to outpace the industry’s historical energy efficiency trend by at least 70 percent.

AMD continued to gain momentum with its embedded products in the second quarter.

The company introduced the 2nd-generation embedded R-Series APU as well as the AMD embedded G-Series SoC and CPU solutions, which will power HP thin clients and Advantech’s new embedded industrial solution and are ideally suited for ATMs, kiosks and medical equipment applications.

AMD embedded Radeon™ graphics were selected by Boeing for its next-generation advanced cockpit display systems.

AMD publicly demonstrated for the first time its 64-bit ARM-based AMD Opteron™ A-Series processor, codenamed “Seattle,” a significant step forward in expanding the footprint of ultra-efficient 64-bit ARM solutions for cloud computing and the Internet of Things.

AMD expanded its mobile APU offerings in the quarter:

Acer, Dell, HP and Lenovo have all introduced notebooks powered by AMD’s newest 3rd-generation mainstream mobile APUs, which combine category-leading compute performance^2,3 with unique features and rich user interactions.

AMD also launched its most advanced mobile APUs for consumer and commercial notebooks. The new 2014 performance mobile APUs include AMD’s first FX-branded enthusiast class APU for notebooks as well as AMD Pro A-Series APUs. HP is offering the AMD PRO A-Series APUs across its Elite 700-Series notebooks, desktops and all-in-ones, with additional OEMs expected to introduce systems later this year.

AMD expanded its 2nd-generation Graphics Core Next-based professional graphics solutions with the introduction of the AMD FirePro W8100 professional graphics card, which delivers 38x more performance⁴ than the closest competitive offerings based on double precision testing. Dell, HP and more than 10 workstation system integrators have all announced systems featuring the new card.

AMD’s groundbreaking Mantle API, which creates more immersive experiences that take fuller advantage of modern APUs and GPUs to deliver console-like experiences, will be used by Electronic Arts in the upcoming Battlefield Hardline™, Dragon Age: Inquisition™ and Plants vs. Zombies: Garden Warfare™ games. More than 40 game titles supporting Mantle are in development with more than 50 developers actively working with the API for future titles.

(Millions)

GAAP operating income (loss)

Workforce rebalancing severance charges

Amortization of acquired intangible assets

Restructuring and other special charges, net

Non-GAAP operating income (loss)

(Millions except per share amounts)

GAAP net loss / Loss per share

Workforce rebalancing severance charges

Loss on debt redemption

Amortization of acquired intangible assets

Restructuring and other special charges, net

Non-GAAP net income (loss) / Earnings (loss) per share

Net revenue

Cost of sales

Gross margin

Gross margin %

Research and development

Marketing, general and administrative

Amortization of acquired intangible assets

Restructuring and other special charges, net

Operating income (loss)

Interest income

Interest expense

Other expense, net

Loss before income taxes

Provision for income taxes

Net loss

Net loss per share

Basic

Diluted

Shares used in per share calculation

Basic

Diluted

ADVANCED MICRO DEVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Millions)

Total comprehensive loss

Assets

Current assets:

Cash and cash equivalents

Marketable securities

Accounts receivable, net

Inventories, net

Prepaid expenses and other current assets

Total current assets

Long-term marketable securities

Property, plant and equipment, net

Acquisition related intangible assets, net

Goodwill

Other assets

Total Assets

Liabilities and Stockholders’ Equity

Current liabilities:

Short-term debt

Accounts payable

Payable to GLOBALFOUNDRIES

Accrued and other current liabilities

Deferred income on shipments to distributors

Total current liabilities

Long-term debt

Other long-term liabilities

Stockholders’ equity:

Capital stock:

Common stock, par value

Additional paid-in capital

Treasury stock, at cost

Accumulated deficit

Accumulated other comprehensive income (loss)

Total stockholders’ equity

Total Liabilities and Stockholders’ Equity

Cash flows from operating activities:

Net loss

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

Employee stock-based compensation expense

Non-cash interest expense

Loss on debt redemptions

Other

Changes in operating assets and liabilities:

Accounts receivable

Inventories

Prepaid expenses and other assets

Payable to GLOBALFOUNDRIES

Accounts payable, accrued liabilities and other

Net cash used in operating activities

Cash flows from investing activities:

Purchases of property, plant and equipment

Purchases of available-for-sale securities

Proceeds from sale and maturity of available-for-sale securities

Net cash used in investing activities

Cash flows from financing activities:

Net proceeds from foreign grants and allowances

Proceeds from issuance of common stock

Proceeds from borrowings, net

Repayments of long-term debt and capital lease obligations

Other

Net cash provided by financing activities

Net decrease in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

Segment and Category Information

Computing Solutions (1)

Net revenue

Operating income (loss)

Graphics and Visual Solutions (2)

Net revenue

Operating income

All Other (3)

Operating loss

Total

Net revenue

Operating income (loss)

Other Data

Depreciation and amortization, excluding amortization of acquired intangible assets

Capital additions

Adjusted EBITDA (4)

Cash, cash equivalents and marketable securities

Non-GAAP free cash flow (5)

Total assets

Total debt

Headcount

GAAP operating income (loss)

Workforce rebalancing severance charges

Depreciation and amortization

Employee stock-based compensation expense

Amortization of acquired intangible assets

Restructuring and other special charges, net

Adjusted EBITDA

(5)    Non-GAAP free cash flow reconciliation**

GAAP net cash used in operating activities

Purchases of property, plant and equipment

Non-GAAP free cash flow