AMD Operating Expense Breakdown Analysis

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This article presents Advanced Micro Devices (AMD)’s operating expense breakdown by category.

AMD’s operating expenses consist of research and development (R&D), marketing, general and administrative (MG&A), amortization of acquisition-related intangibles, and restructuring charges.

Let’s look at the breakdowns!

For other key statistics of AMD, you may find more resources on these pages:

Revenue

• AMD revenue segments: data center, gaming, embedded, etc.,
• AMD revenue by region: U.S., Japan, China, Europe, Taiwan, etc.,

Profit Margin

• AMD profit margin by segment: data center, gaming, client, etc.,
• AMD vs Nvidia: profit margin comparison,
• AMD vs Intel: profit margin analysis,

R&D Budget

• AMD vs Nvidia: research and development spending,
• AMD vs Intel: R&D cost

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Definitions Of Segments

To help readers understand the content better, the following terms and glossaries have been provided.

Marketing, general and administrative (MG&A): Marketing Expenses cover all activities directly related to promoting and selling the product.

This includes advertising campaigns, sales commissions, trade show participation, public relations, and social media management. These costs are often variable, scaling up or down based on the company’s growth strategy and sales targets.

General and Administrative (G&A) Expenses are the fixed overhead costs needed to keep the business running, regardless of sales volume. This category includes salaries for non-sales staff (executives, HR, finance, legal), office rent, utilities, insurance, professional fees (legal and accounting), and office supplies.

These expenses are essential for maintaining the corporate structure and compliance.

Amortization of acquisition-related intangibles: Amortization of acquisition-related intangibles is a non-cash expense recorded on a company’s income statement following a merger or acquisition.

When one company buys another, it often pays more than the value of the physical assets (like factories or inventory). The excess purchase price is allocated to specific intangible assets — valuable resources that lack physical form, such as patents, trademarks, customer lists, and proprietary technology.

Since these intangible assets have a finite “useful life” (for example, a patent expires after 20 years, or technology becomes obsolete), accounting rules require the company to spread the cost of these assets over that time period. This process of gradually writing off the cost is called amortization. It ensures that the expense of acquiring the asset is matched against the revenue it helps generate over time.

While this charge reduces a company’s reported net income (GAAP earnings), it does not impact cash flow, as the actual money was already spent when the acquisition occurred. For this reason, investors and analysts often exclude this specific amortization when calculating “adjusted” or “non-GAAP” earnings to get a clearer picture of the company’s ongoing operating performance.

Restructuring charges: Restructuring charges are one-time costs incurred by a company when it significantly reorganizes its operations to improve long-term efficiency and profitability.

These charges act as a financial “reset button,” often signaling a major shift in strategy, such as merging with another company, exiting a specific market, or downsizing the workforce to cut costs.

These expenses typically cover costs related to workforce reductions (severance pay and benefits for laid-off employees), closing or consolidating facilities (lease termination fees and moving costs), and writing down assets (reducing the value of inventory or equipment that is no longer needed).

Because these are considered unusual or infrequent events, analysts often exclude restructuring charges from a company’s “adjusted” earnings to better assess its ongoing operational performance.

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Summary of Operating Expenses Breakdown Across Different Categories

The following analysis consolidates the trends observed across AMD’s operating expenses, expense mix, and year-over-year growth for the 2019–2025 period.

• AMD’s operational strategy has shifted aggressively toward high-performance computing and AI, evidenced by a massive scaling of its expense structure. Total operating expenses have grown six-fold from $2.3 billion in 2019 to a projected $13.5 billion in 2025.

• This expansion caused the “OpEx-to-Revenue” ratio to spike from a disciplined ~26% in 2021 to over 44% in 2023, largely due to the absorption of Xilinx and its associated amortization costs. However, as revenue growth accelerates, this ratio is beginning to normalize, dropping to 38.9% in 2025, indicating improving operating leverage.

• Research & Development (R&D) remains the cornerstone of AMD’s strategy, consistently commanding ~60% of the total budget and growing every single year — peaking with a $8.1 billion investment in 2025.

• While amortization costs from acquisitions initially weighed heavily on the books (22% of expenses in 2022), they are steadily declining.

• In contrast, Marketing, General, and Administrative (MG&A) expenses are seeing a resurgence; after a brief dip in 2023, they are projected to jump 51.5% in 2025, signaling a renewed push to capture market share and commercialize their new AI product portfolio.

The following table summarizes the average performance of AMD’s operating expenses over the latest three fiscal years.

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Operating Expenses to Revenue Ratio

AMD’s operating expenses consist of research and development (R&D), marketing, general and administrative (MG&A), amortization of acquisition-related intangibles, and restructuring charges.

The definitions of AMD’s operating expenses are available here: Marketing, general and administrative (MG&A), Amortization of acquisition-related intangibles, and Restructuring charges.

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Operating Expenses in R&D, MG&A, Amortization, Restructuring, and Total OpEx

AMD’s operating expenses consist of research and development (R&D), marketing, general and administrative (MG&A), amortization of acquisition-related intangibles, and restructuring charges.

The definitions of AMD’s operating expenses are available here: Marketing, general and administrative (MG&A), Amortization of acquisition-related intangibles, and Restructuring charges.

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Percentage of Operating Expenses in R&D, MG&A, Amortization, Restructuring, and Total OpEx

AMD’s operating expenses consist of research and development (R&D), marketing, general and administrative (MG&A), amortization of acquisition-related intangibles, and restructuring charges.

The definitions of AMD’s operating expenses are available here: Marketing, general and administrative (MG&A), Amortization of acquisition-related intangibles, and Restructuring charges.