Advanced Micro Devices Inc. (NASDAQ:AMD)

The cash flow statement reveals a fluctuating financial performance over the five-year period. While net cash provided by operating activities generally increased, significant variations occurred in investing and financing activities, impacting overall cash position.

Operating Activities

Net cash provided by operating activities demonstrated an overall positive trend, increasing from US$3,521 million in 2021 to US$6,493 million in 2025. However, a notable decrease was observed in 2023, falling to US$1,667 million, before recovering strongly in subsequent years. This volatility is linked to changes in net income, alongside adjustments for non-cash items and working capital fluctuations. Specifically, accounts receivable and inventories consistently represented cash outflows, increasing in magnitude over time, while accounts payable and accrued liabilities provided cash inflows, though with some variability.

Investing Activities

Investing activities exhibited substantial year-to-year changes. 2022 saw a significant net cash inflow of US$1,999 million, largely attributable to proceeds from the maturity and sale of short-term investments and cash received from the Xilinx acquisition. However, subsequent years experienced net cash outflows, with 2025 showing a particularly large outflow of US$6,851 million, driven by increased purchases of short-term investments and acquisitions. Purchases of property and equipment remained consistently negative, indicating ongoing capital expenditure. The amortization of acquisition-related intangibles, a significant non-cash expense, peaked in 2022 at US$3,548 million and gradually decreased over the period.

Financing Activities

Financing activities consistently resulted in net cash outflows throughout the period. Repurchases of common stock and stock repurchases for tax withholding on employee equity plans were the primary drivers of these outflows, totaling billions of dollars annually. Proceeds from debt issuance provided some offset in 2022 and 2025, but were insufficient to counteract the stock repurchase programs. A settlement of contingent consideration liability contributed to outflows in 2025.

Net Cash and Cash Position

The net increase (decrease) in cash, cash equivalents, and restricted cash varied considerably. A substantial increase was recorded in 2021 and 2022, followed by a decrease in 2023. 2025 showed a positive increase again. Consequently, the cash balance at the end of each year fluctuated, ultimately reaching US$5,556 million in 2025, representing an increase from the US$2,535 million balance at the beginning of the period. The inclusion of cash flows from discontinued operations in 2025 significantly boosted the net increase in cash.

Key Observations

The company’s cash flow is heavily influenced by its investment and financing decisions, particularly regarding acquisitions, short-term investments, and stock repurchases. While operating activities generally generate positive cash flow, the substantial outflows from investing and financing activities create volatility in the overall cash position. The significant increase in net income in 2025, coupled with cash flows from discontinued operations, contributed to a strong ending cash balance.