Thank you, Matt, and good afternoon to all those listening today.
We delivered very strong second quarter results, with revenue exceeding the midpoint of guidance as higher EPYC and Ryzen processor sales more than offset headwinds from export controls that impacted Instinct sales. We set records for both EPYC and Ryzen CPU sales, reflecting the broad-based demand for our differentiated high-performance data center, PC and embedded processors.
Second quarter revenue increased 32% year-over-year to a record $7.7 billion, and we delivered over $1 billion in free cash flow. Excluding the $800 million inventory write-down related to data center AI export controls, gross margin was 54%, marking our sixth consecutive quarter of year-over-year margin expansion led by a richer product mix.
Turning to the segments. Data Center segment revenue increased 14% year-over-year to $3.2 billion.
We saw robust demand across our EPYC portfolio to power cloud and enterprise workloads and increasingly for emerging AI use cases. In particular, adoption of agentic AI is creating additional demand for general purpose compute infrastructure as customers quickly realize that each token generated by a GPU triggers multiple CPU-intensive tasks. Against this backdrop, fifth-gen EPYC Turin shipments ramped significantly, and we had sustained demand for our prior-generation EPYC processors. As a result, we set records for both cloud and enterprise CPU sales and delivered our 33rd consecutive quarter of year-over-year share gains. In cloud, adoption expanded with the largest hyperscalers as they deployed EPYC to power more of their mission-critical infrastructure, services and public cloud products. More than 100 new AMD-powered cloud instances launched in the quarter, including multiple Turin instances from Google and Oracle Cloud that deliver up to twice the performance of our previous generation, which were already the industry's highest-performing offerings. There are now nearly 1,200 EPYC cloud instances available globally as providers continue expanding both the breadth and regional availability of their AMD offerings. This continued expansion is accelerating enterprise adoption of EPYC in the cloud, with deployments growing significantly from the prior quarter as we closed large wins with dozens of large aerospace, streaming, financial services, retail and energy companies.
EPYC adoption also grew with telecom customers as providers modernize their infrastructure for next-generation networks. For example, KDDI announced plans to deploy EPYC processors to power its 5G virtualized network. And Nokia selected EPYC for its cloud platform used by service providers to build, deploy and manage core network functions.
Turning to enterprise on-prem adoption. HPE, Dell, Lenovo and Super Micro launched 28 new Turin platforms in the quarter that deliver leadership performance, efficiency and TCO across a wide range of enterprise workloads. EPYC enterprise deployments grew significantly from the prior quarter, supported by new wins with large technology, automotive, manufacturing, financial services and public sector customers. To extend our momentum with SMB and hosted IT service customers, we launched the EPYC 4005 Series that combine enterprise-grade performance and features and cost-optimized platforms purpose built for smaller scale deployments.
Turning to HPC. AMD now powers more than 1/3 of the world's fastest supercomputers, including El Capitan and Frontier, which retained the #1 and #2 spots on the latest Top 500 list. We also power 12 of the top 20 systems on the Green500, highlighting the performance per watt advantages of EPYC and Instinct for large-scale deployments. Looking ahead, we remain bullish on our server CPU business, driven by durable tailwinds, including growing demand for cloud and on-prem compute, sustained share gains, and the growing investments in general purpose infrastructure required to enable AI.
Turning to our Data Center AI business. Revenue declined year-over-year as U.S. export restrictions effectively eliminated MI308 sales to China, and we began transitioning to our next-generation MI350 series accelerators. We made solid progress with MI300 and MI325 in the quarter, closing new wins and expanding adoption with Tier 1 customers, next-generation AI cloud providers and end users. Today, 7 of the top 10 model builders and AI companies use Instinct, underscoring the performance and TCO advantages of our Data Center AI solutions. We launched our Instinct MI350 series with industry-leading memory bandwidth and capacity and broad adoption across hyperscalers, AI companies and OEMs. From a competitive standpoint, MI355 matches or exceeds B200 in critical training and inference workloads and delivers comparable performance to GB200 for key workloads at significantly lower cost and complexity. For upscale inferencing, MI355 delivers up to 40% more tokens per dollar, providing leadership performance and clear TCO advantages.
With the MI350 series, we're also expanding our system-level capabilities to support deployments powered by AMD CPUs, GPUs and NICs. As one example, Oracle is building a 27,000-plus node AI cluster combining MI355X accelerators, fifth-gen EPYC Turin CPUs and Pollara 400 SmartNICs. We began volume production of the MI350 series ahead of schedule in June and expect a steep production ramp in the second half of the year to support large-scale production deployments with multiple customers. Our sovereign AI engagements accelerated in the quarter as governments around the world adopt AMD technology to build secure AI infrastructure and advance their economies. As one example, we announced a multibillion-dollar collaboration with HUMAIN to build AI infrastructure powered entirely on AMD CPUs, GPUs and software. Initial deployments are underway in key regions with quarterly expansions planned over the coming years. In addition, we have more than 40 active engagements globally and see significant opportunities to power an increasingly larger portion of national computing centers and sovereign AI initiatives. On the AI software front, we made significant progress this quarter increasing the performance, improving the usability and expanding the adoption of ROCm.
We announced ROCm 7 with major upgrades across every layer of the stack, delivering more than 3x higher inferencing and training performance compared to our prior generation and adding support for large-scale training, distributed inference and lower precision data types. To deepen developer engagement, we introduced nightly ROCm builds and expanded access to Instinct compute infrastructure, including launching our first developer cloud that provides preconfigured containers for instant access to AMD GPUs. We also expanded native support for ROCm across key frameworks, including vLLM and SGLang, enabling Frontier models like Llama 4, Gemma 3 and DeepSeek-R1 to launch with day 0 AMD support. To accelerate enterprise adoption, we introduced ROCm Enterprise AI, a full-stack platform that integrates seamlessly with existing IT infrastructure and includes everything needed for an enterprise to deploy, manage and scale AI across their business.
Looking ahead, the development of our next-generation MI400 series is progressing rapidly. These are the most advanced GPUs we have ever built with up to 40 petaflops of FP4 AI performance and 50% more memory, memory bandwidth and scale-out throughput than the competition. With the MI400 series, we're bringing together everything we've learned across silicon, software and systems to deliver Helios, a full-stack rack scale AI platform. Helios is purpose built for the most demanding AI workloads with each rack connecting up to 72 GPUs that can operate as a single massive AI accelerator. Helios is expected to deliver up to a 10x generational performance increase for the most advanced Frontier models, and we believe it will be the highest-performance AI system in the world when it launches. MI400 series development is progressing well towards our planned launch in 2026, with significant interest in large-scale deployments from multiple high-profile customers.
To accelerate our development, we have invested significantly to expand our AI software and hardware capabilities, both organically and inorganically with a number of acquisitions and strategic investments. We strengthened our software stack last quarter with the addition of the Brium and Lamini teams, building on our acquisitions of Nod.ai, Mipsology, and Silo AI. On the hardware side, we added a world-class rack and data center scale design team in the second quarter with our acquisition of ZT Systems. The ZT team is integrated seamlessly, and they are actively engaging with multiple customers to accelerate deployments of our Helios solutions at scale. We also announced last quarter that Sanmina intends to acquire ZT's U.S.-based manufacturing business, becoming our lead partner for AI rack manufacturing.
Turning to the AI regulatory environment. Earlier this quarter, we were notified by the Department of Commerce that it is moving forward with the review of our license applications to export MI308 to China. We appreciate the focus the Trump administration is placing on assuring that the U.S. technology remains central to global AI infrastructure, and we expect to resume MI308 shipments as licenses are approved, subject to end customer demand and supply chain readiness. As our licenses are still under review, we are not including any MI308 revenue in our third quarter guidance.
Despite that, we expect Instinct revenue to grow year-over-year in the third quarter, driven by the ramp of MI350 at multiple customers. In Client and Gaming, segment revenue increased 69% year-over-year to $3.6 billion, driven by record client CPU sales and strong demand for our semi-custom game console SoCs and Radeon GPUs. Client revenue increased 67% year-over-year to $2.5 billion, led by record desktop CPU sales.
Demand for our latest-generation Ryzen 9000 series was strong, especially for our differentiated X3D processors. We delivered record desktop channel CPU sales as Ryzen processors consistently topped the best-selling CPU lists at major global e-tailers throughout the quarter. We also expanded our Zen 5 desktop portfolio with the launch of our latest Threadripper processors that feature up to 96 cores and deliver up to double the performance of the competition in many popular content creation and design workloads. In mobile, demand for AMD-powered notebooks was strong with sellout growing by a large double-digit percentage year-over-year. We drove a richer mix of higher ASP mobile parts year-over-year as we expanded our share in the premium notebook segment where our Ryzen AI 300 CPUs deliver leadership performance and value for both general purpose and AI workloads.
In commercial PCs, Ryzen adoption accelerated as OEM consumption increased more than 25% year-over-year. We saw strong sell-through for AMD commercial notebooks with Lenovo and HP and a significant uptick in Dell sales as they ramp availability of their AMD commercial portfolio. We also closed new enterprise wins with Forbes 2000 pharma, tech, automotive, financial services, aerospace and health care companies. We expect to continue growing our commercial client share based on the strength of our product portfolio and expanded breadth of OEM offerings. Looking more broadly, we remain confident we can continue growing client processor revenue ahead of the market over the coming quarters, driven by increased adoption of our desktop and notebook products, growing commercial momentum and a richer product mix. In Gaming, revenue increased 73% year-over-year to $1.1 billion. Semi-custom revenue increased by a large double-digit percentage year-over-year as console inventories normalized and our customers began preparing for the holiday season. We announced a new multiyear collaboration with Microsoft for custom chips that will power the next generation of Xbox devices, including consoles, PCs and handhelds. We also deepened our collaboration with Sony through Project Amethyst, a co-engineering program that will use machine learning to power the next wave of immersive gaming experiences. In PC gaming, demand for our latest-generation Radeon 9000 series GPUs was very strong, with desktop GPU sell-through accelerating in the quarter as demand outpaced supply. We launched the Radeon 9600 XT, extending the performance advantages of RDNA 4 to mainstream gamers and delivering a significant uplift in gaming performance, including more than double the ray tracing of our prior generation. As part of our end-to-end AI strategy, we introduced the Radeon AI Pro R9700 GPU for local inferencing, model fine-tuning and other data-intensive workloads. The R9700 features more memory, full ROCm support and multi-GPU scalability, enabling advanced AI development and deployment directly on the desktop.
Turning to our Embedded segment. Revenue decreased 4% year-over-year to $824 million. Demand continues recovering gradually with sell-through in the second quarter picking up as strength in most markets was offset by a few pockets of softness in inventory reduction actions largely with industrial customers. We expanded our Embedded portfolio with the first production shipments of Spartan UltraScale+ FPGAs that deliver leadership performance and advanced security for cost-sensitive low-power applications. Adoption of our Versal adaptive SoCs continues expanding in high-end applications including next-generation robotaxi platforms developed by Bosch in Europe, where Versal serves as a high-performance controller, enabling real-time processing, security and encryption in fully electric automated vehicles. Looking ahead, we expect improving demand in the test and measurement, communications, and aerospace markets will drive a return to sequential growth in the second half of 2025. Longer term, design win momentum continues to build, tracking ahead of this point last year and putting us on pace to pass the record $14 billion in design wins we achieved in 2024. In summary, demand is very strong across our product portfolio, and we are well positioned to deliver significant growth in the second half of the year, led by the steep ramp of MI350 series accelerators and ongoing EPYC and Ryzen share gains. Our server and PC CPU businesses are accelerating, driven by growing demand for high-performance compute, sustained share gains, the strength of our product portfolio and expanded go-to-market investments. Our Embedded and Gaming businesses are returning to growth and are well positioned for long-term success, supported by strong design win momentum.
And in AI, we are seeing strong adoption of our MI350 series and ROCm 7 as we deliver leadership performance and TCO advantages across a broader range of workloads and ramp deployments with an expanded set of cloud and enterprise customers. Looking ahead, we see a clear path to scaling our AI business to tens of billions of dollars in annual revenue. We are very excited about our next-generation MI400 series, which is another giant step forward on our road map and has been designed to deliver leadership performance at the chip, server and rack levels. Customer interest for the MI400 series is very strong, and we are actively engaging with an expanded set of customers to support large-scale deployments in 2026. We are in the early stages of an industry-wide AI transformation that will drive a step function increase in compute demand across all of our markets, positioning us for significant revenue and earnings growth over the coming years. Now I'd like to turn the call over to Jean to provide some additional color on our second quarter results.