Advanced Micro Devices Inc. (NASDAQ:AMD)

The common-size income statement reveals significant fluctuations in profitability and cost structure over the analyzed period, spanning from March 2021 to December 2025. Net revenue is consistently represented as 100% by definition, allowing for a clear view of the proportional changes in other income statement items.

Gross Profit

Gross profit as a percentage of net revenue demonstrated an initial upward trend, increasing from 46.07% in March 2021 to a peak of 50.27% in December 2021. This trend reversed in subsequent periods, declining to a low of 42.30% in September 2022. A recovery began in late 2022 and continued through mid-2023, reaching 49.08% in June 2023. However, a substantial drop occurred in March 2024, falling to 39.80%, followed by a rebound to 54.30% by December 2025. These fluctuations suggest sensitivity to cost of sales and potentially pricing pressures.

Cost of Sales

Cost of sales, initially representing approximately 53.93% of net revenue, generally decreased through December 2021, reaching 49.17%. A significant increase occurred in the latter half of 2022, peaking at 57.70% in September 2022. This trend continued into early 2024, reaching a high of 60.20% in March 2024, before decreasing substantially to 43.16% by December 2025. This suggests increasing input costs or production inefficiencies during certain periods.

Operating Income

Operating income exhibited considerable volatility. It rose from 19.22% in March 2021 to 25.01% in December 2021, then declined sharply to a loss of -1.15% in September 2022. A recovery commenced in late 2022, culminating in a peak of 11.37% in December 2022. A significant downturn occurred in early 2024, with a loss of -1.74% in March 2024, followed by a strong recovery to 17.06% by December 2025. This pattern closely mirrors the fluctuations in gross profit, indicating a strong correlation between these two metrics.

Research and Development & Marketing, General and Administrative Expenses

Research and development expenses consistently represented a substantial portion of net revenue, ranging from 16.80% to 27.86%. An upward trend was observed from 2021 through 2023, peaking at 26.93% in July 2023, before declining. Marketing, general and administrative expenses also remained significant, fluctuating between 8.45% and 12.90%. Both expense categories appear to be relatively stable as a percentage of revenue, though R&D shows a more pronounced increase in recent periods.

Net Income

Net income followed a similar pattern to operating income, with fluctuations ranging from a loss of -2.60% in March 2024 to a high of 21.40% in September 2021. The period from September 2022 to March 2024 was particularly challenging, with several quarters reporting losses or minimal profits. A strong recovery was observed in the latter half of 2024 and into 2025, with net income reaching 14.71% by December 2025.

The amortization of acquisition-related intangibles increased over time, becoming a more significant expense as a percentage of net revenue. Interest expense remained relatively stable, while other income exhibited considerable variation, contributing positively in some periods and negatively in others. The impact of discontinued operations was minimal, appearing only in June 2025.