Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Paying user area
Try for free
Advanced Micro Devices Inc. pages available for free this week:
- Statement of Comprehensive Income
- Common-Size Income Statement
- Common-Size Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Long-term (Investment) Activity Ratios
- Analysis of Reportable Segments
- Common Stock Valuation Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Selected Financial Data since 2005
- Aggregate Accruals
The data is hidden behind: . Unhide it.
Get full access to the entire website from $10.42/mo, or
get 1-month access to Advanced Micro Devices Inc. for $24.99.
This is a one-time payment. There is no automatic renewal.
We accept:
Profitability Ratios (Summary)
Advanced Micro Devices Inc., profitability ratios
Based on: 10-K (reporting date: 2025-12-27), 10-K (reporting date: 2024-12-28), 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25).
The profitability metrics demonstrate a period of significant fluctuation followed by improvement. Initial values indicate strong profitability, which then declined substantially before exhibiting a recovery trend. This analysis details these shifts across several key ratios.
- Gross Profit Margin
- The gross profit margin experienced a decrease from 48.25% in 2021 to 44.93% in 2022, followed by a partial recovery to 46.12% in 2023. Subsequent years show consistent increases, reaching 49.35% in 2024 and 49.52% in 2025. This suggests improving cost management or pricing strategies in the later periods.
- Operating and Net Profit Margins
- Both operating and net profit margins experienced a substantial decline from 2021 to 2023. The operating profit margin fell dramatically from 22.20% to 1.77%, while the net profit margin decreased from 19.24% to 3.77%. However, both metrics show a clear upward trend from 2023 onwards. The operating profit margin rose to 7.37% in 2024 and 10.66% in 2025, and the net profit margin increased to 6.36% and 12.51% respectively. This indicates a strengthening of overall operational efficiency and profitability.
- Return on Equity (ROE)
- Return on equity mirrored the trend observed in profit margins. A significant decrease occurred from 42.18% in 2021 to 2.41% in 2022, continuing to 1.53% in 2023. A recovery is evident in 2024 (2.85%) and accelerates in 2025, reaching 6.88%. This suggests improving returns to shareholders as profitability recovers.
- Return on Assets (ROA)
- The return on assets followed a similar pattern to ROE, declining from 25.46% in 2021 to 1.95% in 2022 and 1.26% in 2023. Like ROE, ROA demonstrates improvement in subsequent years, increasing to 2.37% in 2024 and 5.64% in 2025. This indicates increasing efficiency in utilizing assets to generate profit.
In summary, the period under review was characterized by a marked decline in profitability metrics between 2021 and 2023, followed by a consistent and accelerating recovery trend from 2023 to 2025. The improvements observed across all ratios suggest a positive shift in the company’s operational performance and financial health.
Return on Sales
Return on Investment
Gross Profit Margin
Advanced Micro Devices Inc., gross profit margin calculation, comparison to benchmarks
| Dec 27, 2025 | Dec 28, 2024 | Dec 30, 2023 | Dec 31, 2022 | Dec 25, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Gross profit | ||||||
| Net revenue | ||||||
| Profitability Ratio | ||||||
| Gross profit margin1 | ||||||
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| Analog Devices Inc. | ||||||
| Applied Materials Inc. | ||||||
| Broadcom Inc. | ||||||
| Intel Corp. | ||||||
| KLA Corp. | ||||||
| Lam Research Corp. | ||||||
| Micron Technology Inc. | ||||||
| NVIDIA Corp. | ||||||
| Qualcomm Inc. | ||||||
| Texas Instruments Inc. | ||||||
Based on: 10-K (reporting date: 2025-12-27), 10-K (reporting date: 2024-12-28), 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25).
1 2025 Calculation
Gross profit margin = 100 × Gross profit ÷ Net revenue
= 100 × ÷ =
2 Click competitor name to see calculations.
The gross profit margin exhibited a fluctuating pattern over the five-year period. While gross profit increased overall, the margin itself did not consistently follow suit, indicating changes in the cost of goods sold relative to revenue.
- Gross Profit Margin Trend
- In 2021, the gross profit margin stood at 48.25%. A decrease was observed in 2022, falling to 44.93%. The margin then experienced a modest recovery in 2023, reaching 46.12%. Further improvement occurred in 2024, with the margin rising to 49.35%. This upward trend continued into 2025, culminating in a margin of 49.52%.
The initial decline in the gross profit margin in 2022 coincided with a substantial increase in net revenue. This suggests that while revenue grew significantly, the cost of goods sold increased at a faster rate, compressing the margin. The subsequent recoveries in 2023 and 2024, alongside continued revenue growth, indicate improved cost management or pricing strategies.
- Relationship to Gross Profit and Net Revenue
- Gross profit increased from US$7,929 million in 2021 to US$17,152 million in 2025, demonstrating overall growth in the company’s ability to generate profit from its core operations. Net revenue also increased substantially, moving from US$16,434 million in 2021 to US$34,639 million in 2025. The stabilization of the gross profit margin near 49.5% in 2025, despite the significant revenue increase, suggests a potential scaling of operations and improved efficiency in managing production costs.
The gross profit margin’s performance suggests a dynamic relationship between revenue, cost of goods sold, and pricing. The company appears to have navigated periods of margin compression and successfully implemented strategies to improve profitability as revenue expanded.
Operating Profit Margin
Advanced Micro Devices Inc., operating profit margin calculation, comparison to benchmarks
| Dec 27, 2025 | Dec 28, 2024 | Dec 30, 2023 | Dec 31, 2022 | Dec 25, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating income | ||||||
| Net revenue | ||||||
| Profitability Ratio | ||||||
| Operating profit margin1 | ||||||
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Analog Devices Inc. | ||||||
| Applied Materials Inc. | ||||||
| Broadcom Inc. | ||||||
| Intel Corp. | ||||||
| KLA Corp. | ||||||
| Lam Research Corp. | ||||||
| Micron Technology Inc. | ||||||
| NVIDIA Corp. | ||||||
| Qualcomm Inc. | ||||||
| Texas Instruments Inc. | ||||||
| Operating Profit Margin, Sector | ||||||
| Semiconductors & Semiconductor Equipment | ||||||
| Operating Profit Margin, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2025-12-27), 10-K (reporting date: 2024-12-28), 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25).
1 2025 Calculation
Operating profit margin = 100 × Operating income ÷ Net revenue
= 100 × ÷ =
2 Click competitor name to see calculations.
The operating profit margin exhibited significant fluctuation over the five-year period. Initial values were strong, followed by a substantial decline, and then a recovery towards levels approaching the initial period.
- Operating Profit Margin - Overall Trend
- The operating profit margin began at 22.20% in 2021. A marked decrease was observed in 2022, falling to 5.36%. This downward trend continued into 2023, reaching a low of 1.77%. A recovery commenced in 2024, with the margin increasing to 7.37%, and continued into 2025, reaching 10.66%.
The decline in operating profit margin from 2021 to 2023 coincided with an increase in net revenue in 2022, suggesting that revenue growth did not translate into proportional profit growth during that period. While net revenue decreased slightly from 2022 to 2023, the operating income experienced a more substantial reduction, contributing to the lowest operating profit margin observed during the analyzed timeframe.
- Operating Income and Net Revenue Relationship
- In 2021, operating income was US$3,648 million on net revenue of US$16,434 million. By 2022, net revenue increased to US$23,601 million, but operating income decreased to US$1,264 million. In 2023, net revenue decreased to US$22,680 million, while operating income further decreased to US$401 million. The subsequent years, 2024 and 2025, show increases in both operating income and net revenue, with operating income reaching US$1,900 million and US$3,694 million respectively, and net revenue reaching US$25,785 million and US$34,639 million respectively. This suggests a strengthening relationship between revenue and profitability in the later years.
The substantial increase in operating profit margin from 2024 to 2025, alongside the growth in both operating income and net revenue, indicates improved operational efficiency or pricing power during that period. The return towards a double-digit operating profit margin in 2025 suggests a positive shift in the company’s profitability profile.
Net Profit Margin
Advanced Micro Devices Inc., net profit margin calculation, comparison to benchmarks
| Dec 27, 2025 | Dec 28, 2024 | Dec 30, 2023 | Dec 31, 2022 | Dec 25, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income | ||||||
| Net revenue | ||||||
| Profitability Ratio | ||||||
| Net profit margin1 | ||||||
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Analog Devices Inc. | ||||||
| Applied Materials Inc. | ||||||
| Broadcom Inc. | ||||||
| Intel Corp. | ||||||
| KLA Corp. | ||||||
| Lam Research Corp. | ||||||
| Micron Technology Inc. | ||||||
| NVIDIA Corp. | ||||||
| Qualcomm Inc. | ||||||
| Texas Instruments Inc. | ||||||
| Net Profit Margin, Sector | ||||||
| Semiconductors & Semiconductor Equipment | ||||||
| Net Profit Margin, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2025-12-27), 10-K (reporting date: 2024-12-28), 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25).
1 2025 Calculation
Net profit margin = 100 × Net income ÷ Net revenue
= 100 × ÷ =
2 Click competitor name to see calculations.
The net profit margin exhibited considerable fluctuation over the five-year period. Initial values were strong, followed by a significant decline, and then a recovery towards higher levels.
- Overall Trend
- The net profit margin began at 19.24% in 2021, representing a robust level of profitability. A substantial decrease was then observed in 2022, falling to 5.59%. This downward trend continued into 2023, reaching a low of 3.77%. A moderate recovery occurred in 2024, with the margin increasing to 6.36%. The most recent year, 2025, demonstrated the strongest improvement, with the net profit margin rising to 12.51%.
- Year-over-Year Changes
- The largest year-over-year decrease occurred between 2021 and 2022, a reduction of 13.65 percentage points. The decline from 2022 to 2023 was less pronounced, at 1.82 percentage points. The increase from 2024 to 2025 was the largest positive change, representing a gain of 6.15 percentage points. The increase from 2023 to 2024 was 2.59 percentage points.
- Relationship to Revenue
- While net revenue increased overall during the period, the net profit margin did not consistently follow suit. The initial decline in net profit margin coincided with a period of significant revenue growth, suggesting that increased costs or other factors offset the benefits of higher sales. The substantial improvement in the net profit margin in 2025 occurred alongside continued revenue growth, indicating improved cost management or pricing power.
The observed volatility in the net profit margin suggests sensitivity to changes in revenue, cost of goods sold, and operating expenses. Further investigation into the underlying drivers of these fluctuations would be beneficial.
Return on Equity (ROE)
Advanced Micro Devices Inc., ROE calculation, comparison to benchmarks
| Dec 27, 2025 | Dec 28, 2024 | Dec 30, 2023 | Dec 31, 2022 | Dec 25, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income | ||||||
| Stockholders’ equity | ||||||
| Profitability Ratio | ||||||
| ROE1 | ||||||
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Analog Devices Inc. | ||||||
| Applied Materials Inc. | ||||||
| Broadcom Inc. | ||||||
| Intel Corp. | ||||||
| KLA Corp. | ||||||
| Lam Research Corp. | ||||||
| Micron Technology Inc. | ||||||
| NVIDIA Corp. | ||||||
| Qualcomm Inc. | ||||||
| Texas Instruments Inc. | ||||||
| ROE, Sector | ||||||
| Semiconductors & Semiconductor Equipment | ||||||
| ROE, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2025-12-27), 10-K (reporting date: 2024-12-28), 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25).
1 2025 Calculation
ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × ÷ =
2 Click competitor name to see calculations.
The return on equity (ROE) exhibited significant fluctuations over the observed five-year period. Initial values were high, followed by a substantial decline, and then a recovery towards the end of the period. Net income and stockholders’ equity both influenced these changes, though not always in a directly proportional manner.
- Overall Trend
- The ROE began at 42.18% in 2021, representing a very strong return for stockholders. A dramatic decrease was then observed in 2022, falling to 2.41%, and continued to decline in 2023, reaching a low of 1.53%. A modest recovery occurred in 2024, with ROE increasing to 2.85%, followed by a more substantial increase to 6.88% in 2025.
- Net Income Influence
- Net income decreased significantly from US$3,162 million in 2021 to US$1,320 million in 2022, and further to US$854 million in 2023. This decline directly contributed to the drop in ROE during those years. Net income then increased to US$1,641 million in 2024 and rose considerably to US$4,335 million in 2025, supporting the subsequent ROE recovery.
- Stockholders’ Equity Influence
- Stockholders’ equity experienced a substantial increase from US$7,497 million in 2021 to US$54,750 million in 2022. This large increase in the equity base, coupled with the decrease in net income, explains the significant drop in ROE from 2021 to 2022. Stockholders’ equity continued to grow, albeit at a slower pace, reaching US$62,999 million in 2025. The relatively slower growth of equity in 2024 and 2025, combined with increasing net income, amplified the ROE improvement during those periods.
The substantial increase in stockholders’ equity in 2022 appears to have diluted the impact of net income on ROE. While net income recovered in subsequent years, the ROE did not return to its 2021 level, indicating that a larger equity base requires a proportionally higher net income to achieve the same ROE.
Return on Assets (ROA)
Advanced Micro Devices Inc., ROA calculation, comparison to benchmarks
| Dec 27, 2025 | Dec 28, 2024 | Dec 30, 2023 | Dec 31, 2022 | Dec 25, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income | ||||||
| Total assets | ||||||
| Profitability Ratio | ||||||
| ROA1 | ||||||
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Analog Devices Inc. | ||||||
| Applied Materials Inc. | ||||||
| Broadcom Inc. | ||||||
| Intel Corp. | ||||||
| KLA Corp. | ||||||
| Lam Research Corp. | ||||||
| Micron Technology Inc. | ||||||
| NVIDIA Corp. | ||||||
| Qualcomm Inc. | ||||||
| Texas Instruments Inc. | ||||||
| ROA, Sector | ||||||
| Semiconductors & Semiconductor Equipment | ||||||
| ROA, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2025-12-27), 10-K (reporting date: 2024-12-28), 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25).
1 2025 Calculation
ROA = 100 × Net income ÷ Total assets
= 100 × ÷ =
2 Click competitor name to see calculations.
The Return on Assets (ROA) exhibited significant fluctuations over the observed five-year period. Initial values were strong, followed by a substantial decline, and then a recovery towards higher levels. A detailed examination of the ROA trend, alongside its constituent components, reveals key insights into the company’s performance.
- Overall Trend
- The ROA began at 25.46% in 2021, representing a highly profitable utilization of assets. This was followed by a dramatic decrease to 1.95% in 2022, and a further decline to 1.26% in 2023. A modest recovery was then observed in 2024, with the ROA reaching 2.37%. The most recent year, 2025, shows a substantial increase to 5.64%, indicating a significant improvement in asset utilization efficiency.
- Key Observations - 2021 to 2022
- The sharp decline in ROA from 2021 to 2022 warrants attention. While net income decreased from US$3,162 million to US$1,320 million, the primary driver of this decline was a considerable increase in total assets, rising from US$12,419 million to US$67,580 million. This suggests a significant investment in assets that did not immediately translate into proportional gains in net income.
- Key Observations - 2022 to 2024
- From 2022 to 2023, the ROA continued to decrease, albeit at a slower pace. Total assets remained relatively stable between 2022 and 2023, while net income experienced a further reduction. The slight increase in ROA in 2024 coincided with an increase in net income to US$1,641 million, while total assets continued to grow, but at a slower rate than the income increase.
- Key Observations - 2024 to 2025
- The substantial increase in ROA to 5.64% in 2025 is primarily attributable to a significant rise in net income to US$4,335 million. Total assets also increased, but not at the same rate as net income, resulting in a markedly improved ROA. This indicates a more efficient utilization of the asset base to generate profits in the most recent period.
In summary, the ROA trend demonstrates a period of initial strength followed by a substantial decline and subsequent recovery. The fluctuations in ROA are closely linked to changes in both net income and total assets, highlighting the importance of monitoring both profitability and asset management strategies.