Hey, thanks a lot. Congratulations on these results. Lisa, I wanted to ask you about MI300, how you see it playing out sequentially for the rest of the year. I guess there is about $2.8 billion left to hit your annual target. So I'm wondering if you see things picking up in the fourth quarter and how that's going sequentially. And if you don't mind, I wanted to also ask about next year if you see potential for rapid growth. You're probably aware of some of the chatter out there, and I just was wondering if you are already seeing signs that you can grow significantly, given your roadmap for next year. Thank you so much. Lisa Su (CEO): Yes. Great, Ben. Thanks for the question. So first of all on MI300 and the customer evolution, we are very happy with how MI300 has progressed. When we started the year, I think the key point for us was to get our products into our customers' data centers, to have them qualify their workloads, to really ramp in production and then see what the production capabilities are especially performance and all of those things. And I can say now being more than halfway through the year, we've seen great progress across the board. As we look into the second half of the year, I think we would expect that MI300 revenue would continue to ramp in the third quarter and the fourth quarter. And we are continuing to expand both current deployments with our existing customers, as well as we have a large pipeline of customers that we are working through that are getting familiar with our architecture and software and all that stuff. So I'd say overall, very pleased with the progress, and really continuing right on track to what we expected from the capabilities of the product. As we go into next year, I mean one of the important things that we announced at Computex was increasing and expanding our roadmap. I think we feel really good about our roadmap. We are on track to launch MI325 later this year. And then next year, our MI350 series, which will be very competitive with Blackwell Solutions. And then we're well on our way to our CDNA Next as well. So I think overall we remain quite bullish on the overall AI market. I think the market continues to need more compute. And we also feel very good that our hardware and software solutions are getting good traction, and we are continuing to expand that pipeline. null (Operator): And the next question comes from the line of Aaron Rakers with Wells Fargo. Please proceed with your question.

Yeah, thanks for taking my question. And congrats on the quarter as well. I guess sticking on the Data Center side, as we look forward and you think about the full year, I'm curious about how you're currently thinking about the EPYC server CPU growth expectations as we go forward. And any kind of updated thoughts on your ability to kind of continue to gain share in the server market? Just kind of update us on how you see the server market playing out over the next couple of quarters. Lisa Su (CEO): Yes, we are very pleased with the progress we have made with EPYC. Our fourth-generation EPYC, particularly between Zen 1 and Bergamo, is performing exceptionally well. We have seen broad adoption across cloud platforms as well as strong focus on enterprise and third-party cloud instances. We are starting to see good traction in enterprise among both new and existing customers, and we are also witnessing an increase in third-party cloud adoption. Overall, our EPYC portfolio has been successful. Looking ahead to the second half of the year, we feel optimistic. The market appears to be improving, with signs of increased spending in both enterprise and cloud sectors. Additionally, we are in the process of launching Turin, which began production in the second quarter, and we expect to roll it out widely in the second half of the year, contributing to our revenue. Overall, we believe that the server market and our ability to continue growing our share in it look promising as we move into the second half of the year. null (Operator): And the next question comes from the line of Timothy Arcuri with UBS. Please proceed with your question.

Thanks a lot. Lisa, I wanted to ask about the Data Center GPU roadmap. As you said, 325 launching later this year, so I guess I had two questions. Does the greater than $4.5 billion, does that include any revenue from 325? And can you talk a little bit more about 350? Obviously, we are seeing a big rack-scale or shift toward rack-scale systems for the competition's product. And I'm wondering if that's what 350 is going to look like. Is it going to have liquid cooling and is it going to have a rack-scale aspect to it? Thanks. Lisa Su (CEO): Yes, absolutely. So let me start with your original question. I mean, I think looking at 325X, we are on track to launch later this year. From a revenue standpoint, there will be a small contribution in the fourth quarter, but it really is still mostly the MI300 capabilities. And 325 will start in the fourth quarter and then ramp more in the first half of next year. And then as we look at the 350 series, what we are seeing and the reason we call it a series is because there will be multiple SKUs in that series that we'll go through the range of, let's call it, air-cooled to liquid-cooled. In spending time with our customers, I think there are people who certainly want more rack-level solutions, and we are certainly doing much more in terms of system-level integration for our products. You will see us invest more in system-level integration. But we also have many customers who want to use their current infrastructure. I think the beauty of the MI350 series is, it actually fits into the same infrastructure as the MI300 series. And so it would lend itself to, let's call it, a pretty fast ramp if you've already invested in 300 or 325. So we see the range of options, and that's part of the expansion of the roadmap that we are planning. null (Operator): And the next question comes from the line of Ross Seymore with Deutsche Bank. Please proceed with your question.

Hi, thanks for having me ask a question and congrats on the strong results. Well, Data Center is obviously very important. I just want to pivot to the Client side. Lisa, can you talk about the AI PC side of things? How you believe AMD is positioned? Are you seeing any competitive intensity changing with the emergence of ARM-based systems? Just wanted to see how you are expecting that to roll out and what it means to second-half seasonality. Lisa Su (CEO): Yes, sure, Ross. So first, we are very pleased with our Client business results. I think we have a very strong roadmap, so I'm very pleased with the roadmap. The Zen 5 based products, we're launching both notebook and desktop in the middle of this year. What we've seen is actually very positive feedback on the product. So we just actually launched the first Strix-based notebooks over the weekend. They went on sale. You may have seen some of the reviews. The reviews are very positive. Our view of this is the AI PC is an important add to the overall PC category. As we go into the second half of the year, I think we have better seasonality in general, and we think we can do, let us call it above-typical seasonality, given the strength of our product launches and when we are launching. And then into 2025, you're going to see AI PCs across sort of a larger set of price points which will also open up more opportunities. So overall, I’d say, the PC market is a good revenue growth opportunity for us. The business is performing well. The products are strong. And we are working very closely with both the ecosystem partners, as well as our OEM partners to have strong launches here into the second half of the year.

And is the ARM side changing anything or not really? Lisa Su (CEO): Look, I think at this point, the PC market is a big market and we are underrepresented in the market. I’d say that we take all of our competition very seriously. That being the case, I think our products are very well positioned. null (Operator): And the next question comes from the line of Matt Ramsay with Cowen. Please proceed with your question.

Thank you very much. Good afternoon. Lisa, I wanted to maybe draw a parallel between the Instinct portfolio that your company is rolling out now and what you guys did five or six years ago with EPYC. And I remember when the Naples product launched, there was a lot of, I’d say, reaction positively and negatively and sort of sentiment around where your roadmap might go to relatively small perturbations in what the volumes were, super early. But if I remember back to that, what was the most important was that was the toehold into the market for long-term engagement, both on the software side and the hardware side with your customers two, three, four generations forward. So is that an accurate parallel to where you guys are with MI300? And maybe you could talk about the level of engagement, the intensity of engagement, the breadth of it across the customer base with 350 and 400. Thanks. Lisa Su (CEO): Yes, we are very pleased with the progress on the Instinct roadmap. This is definitely a long-term endeavor, paralleling the EPYC journey, which expands opportunities, workloads, and deployments with each generation. We are focused on the long game. In the near term, we achieved key milestones this year related to delivering hardware in volume to multiple hyperscalers and large Tier 2 customers. Our software has been deployed in various environments, and it has matured significantly. ROCm has seen great improvements in features, functions, and out-of-box performance, boosting our confidence through this process. We are also continuing to invest in the networking aspects of building out the rack scale and system-level components. Engaging in long-term discussions across multiple generations is essential. Overall, we see strong progress for MI300, but we still have much work ahead, and our roadmaps will help unlock more opportunities in the coming years. null (Operator): And the next question comes from the line of Vivek Arya with Bank of America Securities. Please proceed with your question.

Thanks for taking my question. Lisa, there seems to be this ongoing industry debate about AI monetization and whether your customers are getting the right ROI on their CapEx. And today, they have these three options, right? They can buy GPUs from your largest competitor with all the software bells and whistles and incumbency, or they can do custom chips, or they can buy from AMD. So how do you think this plays out next year? Do you think your customers, given all this concern around monetization, does it make them consolidate their CapEx around just the other two suppliers? How is your visibility going into next year, given this industry debate? And how will AMD continue to kind of carve a position between these two other competitive choices that are out there? Thank you. Lisa Su (CEO): Yes, sure, Vivek. Well, I mean I think you talk to a lot of the same people that we talk to. I think the overall view on AI investment is we have to invest. I mean, the industry has to invest. The potential of AI is so large to impact the way enterprises operate and all that stuff. So I think the investment cycle will continue to be strong. And then relative to the various choices for the size of the market, I firmly believe that there will be multiple solutions, whether you are talking about GPUs or you are talking about custom chips or ASICs, there will be multiple solutions. In our case, I think we've demonstrated a really strong roadmap and the ability to partner well with our customers. And from the standpoint of that deep engagement, hardware, software co-optimization is so important in that. And for large language models, GPUs are still the architecture of choice. So I think the opportunity is very large. And I think our piece of that is really strong technology with strong partnerships with the key AI market makers.

Thank you, Lisa. Lisa Su (CEO): Thanks, Vivek. null (Operator): And the next question comes from the line of Joe Moore with Morgan Stanley. Please proceed with your question.

Thank you. I also wanted to ask about MI300. Could you discuss the difference between training and inference? I know the initial focus was on inference, but do you have any traction on the training side? And any idea of how that split might change over time? Lisa Su (CEO): Yes, thanks for the question, Joe. As we mentioned regarding MI300, it has several excellent features, particularly its leading memory bandwidth and capacity. Early deployments have primarily focused on inference, and we've seen outstanding performance in that area. We also have customers engaged in training, and we've made significant improvements to our ROCm software stack to facilitate easier training on AMD systems. I anticipate that training will gradually increase over time. Looking ahead, it appears that inference will outpace training in market size, but from AMD's perspective, I expect both areas to present growth opportunities for us. null (Operator): And the next question comes from the line of Toshiya Hari with Goldman Sachs. Please proceed with your question.

Hi, thank you so much for taking the question. I had a question on the MI300 as well. Curiously, if you are currently shipping to demand or if the updated annual forecast of $4.5 billion is in some shape or form supply constrained. I think last quarter you gave some comments on HBM and CoWoS. Curious if you could provide an update there. And then my Part B to my question is on profitability for MI300. I think in the past, you've talked about the business being accretive and improving further over time as you sort of work through the kinks, if you will. Has that view evolved or changed at all, given sort of the competitive intensity and your need to invest, whether it be through organic R&D or some of the acquisitions you've made? Or are you still confident that profit margins in the business continue to expand? Thank you. Lisa Su (CEO): Yes. Sure, Toshiya. Thanks for the question. So on the supply side, let me make a couple of comments and then maybe I'll let Jean comment on sort of the trajectory for the business. So on the supply side, we made great progress in the second quarter. We ramped up supply significantly exceeding $1 billion in the quarter. I think the team has executed really well. We continue to see line of sight to continue increasing supply as we go through the second half of the year. But I will say that the overall supply chain is tight and will remain tight through 2025. So under that backdrop, we have great partnerships across the supply chain. We've been building additional capacity and capability there. And so we expect to continue to ramp as we go through the year. And we'll continue to work both supply as well as demand opportunities, and really that's accelerating our customer adoption overall, and we'll see how things play out as we go into the second half of this year. Jean Hu (CFO): Yes. On your second question about the profitability, first our team has done a tremendous job to ramp the product MI300. It is a very complex product. So we ramped it successfully. At the same time, the team also started to implement operational optimization to continue to improve gross margin. So we continue to see the gross margin improvement. Over time, in the longer term, we do believe gross margin will be accretive to corporate average. From a profitability perspective, AMD always invests in platforms. If you look at our Data Center platform especially both the Server and the Data Center GPU side, we are ramping the revenue. The business model can leverage very significantly even from the GPU side. Because the revenue ramp has been quite significant, the operating margin continued to expand. We definitely want to continue to invest as the opportunity is huge. At the same time, it is a profitable business already.

Thank you very much. null (Operator): And the next question comes from the line of Stacy Rasgon with Bernstein Research. Please proceed with your question.

Hi, guys. Thanks for taking my question. I wanted to dig into the Q3 guidance a little bit, if I could. So with Gaming down double digits, it probably means you've got close to $1 billion of growth revenue across Data Center, Client, and Embedded. I was wondering if you could give us some color on how that $1 billion-ish splits out across those three businesses. Like if I had 70% of it going to Data Center and 20% going to Client and 10% going to Embedded, like would that be way off? Or how should we think about that apportioning out across the segment? Lisa Su (CEO): Yes. Maybe Stacy, let me give you the following color. So the Gaming business is down double digits as you state. Think of it as the Data Center is the largest piece of it, client next. And then on the Embedded side, think of it as single-digit sequential growth. We expect to see growth in both the Instinct GPUs and the server side. null (Operator): And the next question comes from the line of Harsh Kumar with Piper Sandler. Please proceed with your question.

Hi, Lisa. From what I understand, the significant difference in adoption between your Instinct products and those of your closest competitor seems to stem from the rack-level performance and the associated infrastructure that you might be missing. You mentioned UALink, and I would like you to elaborate on that and provide more insight on when the gap might be closed. Is this a significant step for the industry to help close that gap? Any information you can share would be appreciated. Lisa Su (CEO): Yes. So Harsh, overall, maybe if I take a step back and just talk about how the systems are evolving, there is no question that the systems are getting more complex, especially as you go into large training clusters, and our customers need help to put those together. And that includes the sort of Infinity Fabric-type solutions that are the basis for the UALink things as well as just general rack-level system integration. I think what you should expect, Harsh is, first of all, we're very pleased with all of the partners that have come together for UALink. We think that's an important capability. But we have all of the pieces of this already within sort of the AMD umbrella with our Infinity Fabric, with the work with our networking capability through the acquisition of Pensando. And then you'll see us invest more in this area. So this is part of how we help customers get to market faster is by investing in all of the components, so the CPUs, the GPUs, the networking capability as well as system-level solutions.

Thank you, Lisa. Lisa Su (CEO): Thanks, Harsh. null (Operator): And the next question comes from the line of Blayne Curtis with Jefferies. Please proceed with your question.

Hi, good afternoon. Thanks for taking my question. I just want to ask another question on MI300. Just curious if you can kind of characterize the makeup of the customers in the first half. I know you had, end of last year, a government customer. Is there still a government contingency? And kind of the second part of it is really you've invested in all these software assets. Kind of curious the challenge of ramping the next wave of customers. I know there's been a lot of talk on some hardware challenges, memory issues and such, but then you're investing in software. I'm sure that's a big challenge, too. Just kind of curious what the biggest hurdle is for you to kind of get that next wave of customers ramp. Lisa Su (CEO): Yes. There are many aspects to your question, so let me address each one. Regarding your inquiry about supercomputing, that mainly pertained to the fourth quarter and partly to the first quarter. When considering our second quarter revenue, it is almost entirely from AI, specifically the MI300X for large AI, hyperscalers, and OEM customers targeting enterprise and Tier 2 data centers. In terms of what we're doing, regarding memory, there is a lot of noise in the system that I wouldn't focus on. We've experienced an incredible ramp, and I'm genuinely proud of the team for achieving the fastest product ramp to over $1 billion in the second quarter, with continued growth in the third and fourth quarters. We have multiple suppliers qualified on HBM3, and while memory can be tricky, we've managed it effectively and are also qualifying HBM3E for future products with various memory suppliers. The exciting part is how much better the ROCm capability has improved due to extensive customer usage. We focus on out-of-box performance and how quickly customers can get started with the MI300. Depending on the software used, particularly with higher-level frameworks like PyTorch, customers can be up and running in just a few weeks, which is fantastic for expanding our overall portfolio. We will keep investing in software, which is why we acquired Silo AI, bringing in 300 skilled scientists and engineers with experience in AMD hardware to assist customers. We view this as an opportunity to grow our customer base with talent from Silo AI and Nod.ai, which provided substantial compiler expertise, while we continue to hire organically. As Jean mentioned earlier, we see leverage in our model, but we plan to keep investing because the opportunity is enormous, and we have all the necessary components. This is all about scaling up.

Thanks so much. Lisa Su (CEO): Thanks. null (Operator): And the next question comes from the line of Tom O'Malley with Barclays. Please proceed with your question.

Hi, Lisa. Thanks for taking my question. I'll give you a breather from the MI300 for a second, but just to focus on Client in the second half. No problem. Focused on Client in the second half, you kind of said above-seasonal for September, December. You're obviously launching a new notebook, desktop product, but you're also talking about AI PC. Could you just break down where you're seeing those above-seasonal trends? Is it the ASP uplift you're getting from the new products? Is it a unit assumption that's coming with AI PC? Just any kind of breakdown between those two and why you're seeing it a little bit better. Thank you. Lisa Su (CEO): Sure, Tom. So I think you actually said it well. We are launching Zen 5 desktops and notebooks with volume ramping in the third quarter. And that’s the primary reason that we see above-seasonal. The AI PC element is certainly one element of that, but there is just the overall refresh. Usually, desktop launches going into a third quarter are good for us, and we feel that the products are very well positioned. So those are the primary reasons. null (Operator): And our final question comes from the line of Chris Danely with Citi. Please proceed with your question.

Again. Thanks for bringing me in. Just a question on gross margin. So if we look at your guidance, it seems like the incremental gross margin is dropping a little bit for Q3. Why is that happening? And then just a follow-up on another part of the gross margin angle. Have you changed your gross margin expectations for the MI300? Has the accretion point moved out a little bit? Jean Hu (CFO): Yes, Chris, thank you for your question. We have made significant progress this year in expanding our gross margin, increasing it from 50% in 2023 to an expected 53.5% for Q3. The main reason for this growth is the rapid expansion of our Data Center business, which has increased its revenue contribution from 37% in Q4 of last year to nearly 50% now. This growth is a key factor in our gross margin improvement. In the second half of the year, we anticipate that the Data Center will continue to be the primary contributor to our revenue growth and help with margin expansion, although there are various factors to consider. As Lisa mentioned, the PC business is expected to perform better in the second half, typically driven more by consumer demand during this season, which introduces different dynamics. Additionally, we expect our Embedded business to show sequential growth each quarter, but its recovery will be gradual. Given these factors, the pace of our gross margin expansion may vary, but we do expect continued growth in gross margins. Regarding the MI300, we are confident that it will positively impact our overall average in the long term, and we believe that the Data Center business will remain a strong driver for our gross margin expansion. Mitch Haws (Head of Investor Relations): Thank you. null (Operator): Thank you. I would like to turn the floor back over to Mitch for any closing comments. Mitch Haws (Head of Investor Relations): Great. That concludes today's call. Thanks to all of you for joining us today. null (Operator): And ladies and gentlemen, that does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation.