AMD Reports Fourth Quarter and Full Year 2020 Financial Results

Quar짯ter짯ly reve짯nue of $3.24B up 53% year-over-year; Full year reve짯nue of $9.76B up 45%; quar짯ter짯ly and full year net inco짯me more than dou짯bled from pri짯or year 

SANTA CLARA, Calif., Jan. 26, 2021 (GLOBE NEWSWIRE)  AMD (NASDAQ:AMD) today announ짯ced reve짯nue for the fourth quar짯ter of 2020 of $3.24 bil짯li짯on, ope짯ra짯ting inco짯me of $570 mil짯li짯on, net inco짯me of $1.78 bil짯li짯on and diluted ear짯nings per share of $1.45. Fourth quar짯ter net inco짯me included an inco짯me tax bene짯fit of $1.30 bil짯li짯on asso짯cia짯ted with a valua짯ti짯on allo짯wan짯ce release, which con짯tri짯bu짯ted $1.06 to EPS. On a non-GAAP(*) basis, ope짯ra짯ting inco짯me was $663 mil짯li짯on, net inco짯me was $636 mil짯li짯on and diluted ear짯nings per share was $0.52.

For full year 2020, the com짯pa짯ny repor짯ted reve짯nue of $9.76 bil짯li짯on, ope짯ra짯ting inco짯me of $1.37 bil짯li짯on, net inco짯me of $2.49 bil짯li짯on and diluted ear짯nings per share of $2.06. Full year results included a fourth quar짯ter inco짯me tax bene짯fit of $1.30 bil짯li짯on asso짯cia짯ted with a valua짯ti짯on allo짯wan짯ce release, which con짯tri짯bu짯ted $1.07 to annu짯al EPS. On a non-GAAP(*) basis, ope짯ra짯ting inco짯me was $1.66 bil짯li짯on, net inco짯me was $1.58 bil짯li짯on and diluted ear짯nings per share was $1.29.

GAAP Quar짯ter짯ly Finan짯cial Results

  Q4 2020 Q4 2019 Y/Y Q3 2020 Q/Q
Reve짯nue ($M) $3,244 $2,127 Up 53% $2,801 Up 16%
Gross pro짯fit ($M) $1,451 $949 Up 53% $1,230 Up 18%
Gross mar짯gin 45% 45% Flat 44% Up 1pp
Ope짯ra짯ting expen짯ses ($M) $881 $601 Up 47% $781 Up 13%
Ope짯ra짯ting inco짯me ($M) $570 $348 Up 64% $449 Up 27%
Tax Valua짯ti짯on Allo짯wan짯ce Release Bene짯fit ($M) $1,301
Net inco짯me ($M) $1,781 $170 Up 948% $390 Up 357%
Ear짯nings per share $1.45 $0.15 Up 867% $0.32 Up 353%

Non-GAAP(*) Quar짯ter짯ly Finan짯cial Results

  Q4 2020 Q4 2019 Y/Y Q3 2020 Q/Q
Reve짯nue ($M) $3,244 $2,127 Up 53% $2,801 Up 16%
Gross pro짯fit ($M) $1,452 $950 Up 53% $1,231 Up 18%
Gross mar짯gin 45% 45% Flat 44% Up 1pp
Ope짯ra짯ting expen짯ses ($M) $789 $545 Up 45% $706 Up 12%
Ope짯ra짯ting inco짯me ($M) $663 $405 Up 64% $525 Up 26%
Net inco짯me ($M) $636 $383 Up 66% $501 Up 27%
Ear짯nings per share $0.52 $0.32 Up 63% $0.41 Up 27%

Annu짯al Finan짯cial Results

  GAAP Non-GAAP(*)
  2020 2019 Y/Y 2020 2019 Y/Y
Reve짯nue ($M) $9,763 $6,731 Up 45% $9,763 $6,731 Up 45%
Gross pro짯fit ($M) $4,347 $2,868 Up 52% $4,353 $2,874 Up 51%
Gross mar짯gin 45% 43% Up 2pp 45% 43% Up 2pp
Ope짯ra짯ting expen짯ses ($M) $2,978 $2,297 Up 30% $2,696 $2,094 Up 29%
Ope짯ra짯ting inco짯me ($M) $1,369 $631 Up 117% $1,657 $840 Up 97%
Tax Valua짯ti짯on Allo짯wan짯ce Release Bene짯fit ($M) $1,301
Net inco짯me ($M) $2,490 $341 Up 630% $1,575 $756 Up 108%
Ear짯nings per share $2.06 $0.30 Up 587% $1.29 $0.64 Up 102%

We signi짯fi짯cant짯ly acce짯le짯ra짯ted our busi짯ness in 2020, deli짯ve짯ring record annu짯al reve짯nue while expan짯ding gross mar짯gin and more than doubling net inco짯me from 2019, said Dr. Lisa Su, AMD pre짯si짯dent and CEO. 쏰ur 2021 finan짯cial out짯look high짯lights the strength of our pro짯duct port짯fo짯lio and robust demand for high-per짯for짯mance com짯pu짯ting across the PC, gam짯ing and data cen짯ter mar짯kets. We are exci짯ted about the oppor짯tu짯ni짯ties ahead and very con짯fi짯dent in our long-term stra짯tegy as we con짯ti짯nue exe짯cu짯ting our lea짯der짯ship pro짯duct roadmaps.

Q4 2020 Results

  • Reve짯nue of $3.24 bil짯li짯on was up 53 per짯cent year-over-year and 16 per짯cent quar짯ter-over-quar짯ter dri짯ven by both the Com짯pu짯ting and Gra짯phics seg짯ment and the Enter짯pri짯se, Embedded and Semi-Cus짯tom segment.
  • Gross mar짯gin was 45 per짯cent, flat year-over-year and up 1 per짯cen짯ta짯ge point quarter-over-quarter.
  • Ope짯ra짯ting inco짯me was $570 mil짯li짯on com짯pared to $348 mil짯li짯on a year ago and ope짯ra짯ting inco짯me of $449 mil짯li짯on in the pri짯or quar짯ter. Non-GAAP ope짯ra짯ting inco짯me was $663 mil짯li짯on com짯pared to $405 mil짯li짯on a year ago and $525 mil짯li짯on in the pri짯or quar짯ter. Ope짯ra짯ting inco짯me impro짯ve짯ments were pri짯ma짯ri짯ly dri짯ven by reve짯nue growth.
  • Net inco짯me was $1.78 bil짯li짯on, inclu짯ding an inco짯me tax bene짯fit of $1.30 bil짯li짯on asso짯cia짯ted with a valua짯ti짯on allo짯wan짯ce release, as com짯pared to $170 mil짯li짯on a year ago and $390 mil짯li짯on in the pri짯or quar짯ter. Non-GAAP net inco짯me was $636 mil짯li짯on com짯pared to $383 mil짯li짯on a year ago and $501 mil짯li짯on in the pri짯or quarter.
  • Diluted ear짯nings per share was $1.45, inclu짯ding an inco짯me tax bene짯fit that con짯tri짯bu짯ted $1.06 to ear짯nings per share, as com짯pared to $0.15 a year ago and $0.32 in the pri짯or quar짯ter. Non-GAAP diluted ear짯nings per share was $0.52 com짯pared to $0.32 a year ago and $0.41 in the pri짯or quarter.
  • Cash, cash equi짯va짯lents and short-term invest짯ments were $2.29 bil짯li짯on at the end of the quarter.
  • Ope짯ra짯ting cash flow was $554 mil짯li짯on in the quar짯ter com짯pared to $442 mil짯li짯on a year ago and $339 mil짯li짯on in the pri짯or quar짯ter. Free cash flow was $480 mil짯li짯on in the quar짯ter com짯pared to $400 mil짯li짯on a year ago and $265 mil짯li짯on in the pri짯or quarter.

Quar짯ter짯ly Finan짯cial Seg짯ment Summary

  • Com짯pu짯ting and Gra짯phics seg짯ment reve짯nue was $1.96 bil짯li짯on, up 18 per짯cent year-over-year and quar짯ter-over-quar짯ter pri짯ma짯ri짯ly dri짯ven by strong sales of Ryzen꽓 processors. 
    • Cli짯ent pro짯ces짯sor avera짯ge sel짯ling pri짯ce (ASP) was lower year-over-year due to a hig짯her mix of Ryzen mobi짯le pro짯ces짯sor sales. Cli짯ent pro짯ces짯sor ASP was hig짯her quar짯ter-over-quar짯ter dri짯ven by Ryzen desk짯top pro짯ces짯sor sales.
    • Rade짯on꽓 gra짯phics pro짯duct ASPs were hig짯her year-over-year and quarter-over-quarter.
    • Ope짯ra짯ting inco짯me was $420 mil짯li짯on com짯pared to $360 mil짯li짯on a year ago and $384 mil짯li짯on in the pri짯or quar짯ter. The year-over-year and quar짯ter-over-quar짯ter increa짯ses were pri짯ma짯ri짯ly dri짯ven by hig짯her Ryzen pro짯ces짯sor sales.
  • Enter짯pri짯se, Embedded and Semi-Cus짯tom seg짯ment reve짯nue was $1.28 bil짯li짯on, up 176 per짯cent year-over-year and 13 per짯cent quar짯ter-over-quar짯ter dri짯ven by hig짯her semi-cus짯tom and EPYC꽓 pro짯ces짯sor sales. 
    • Ope짯ra짯ting inco짯me was $243 mil짯li짯on com짯pared to $45 mil짯li짯on a year ago and $141 mil짯li짯on in the pri짯or quar짯ter. Ope짯ra짯ting inco짯me impro짯ve짯ments were pri짯ma짯ri짯ly dri짯ven by hig짯her revenue.
  • All Other ope짯ra짯ting loss was $93 mil짯li짯on, inclu짯ding $14 mil짯li짯on acqui짯si짯ti짯on-rela짯ted cos짯ts, as com짯pared to ope짯ra짯ting los짯ses of $57 mil짯li짯on a year ago and $76 mil짯li짯on in the pri짯or quarter.

2020 Annu짯al Results

  • Reve짯nue of $9.76 bil짯li짯on was up 45 per짯cent over 2019 dri짯ven by signi짯fi짯cant짯ly hig짯her reve짯nue in both the Com짯pu짯ting and Gra짯phics seg짯ment and the Enter짯pri짯se, Embedded and Semi-Cus짯tom segment.
  • Gross mar짯gin was 45 per짯cent, up 2 per짯cen짯ta짯ge points over 2019. Gross mar짯gin expan짯si짯on was pri짯ma짯ri짯ly dri짯ven by Ryzen and EPYC pro짯ces짯sor sales.
  • Ope짯ra짯ting inco짯me was $1.37 bil짯li짯on com짯pared to $631 mil짯li짯on in the pri짯or year. Non-GAAP ope짯ra짯ting inco짯me was $1.66 bil짯li짯on com짯pared to $840 mil짯li짯on in the pri짯or year. The ope짯ra짯ting inco짯me impro짯ve짯ment was pri짯ma짯ri짯ly dri짯ven by hig짯her reve짯nue and gross mar짯gin expansion.
  • Net inco짯me was $2.49 bil짯li짯on, inclu짯ding a $1.30 bil짯li짯on inco짯me tax bene짯fit recor짯ded in the fourth quar짯ter, as com짯pared to $341 mil짯li짯on in the pri짯or year. Non-GAAP net inco짯me was $1.58 bil짯li짯on com짯pared to $756 mil짯li짯on in the pri짯or year.
  • Diluted ear짯nings per share was $2.06, inclu짯ding an inco짯me tax bene짯fit con짯tri짯bu짯ti짯on of $1.07 per share, as com짯pared to $0.30 in the pri짯or year. Non-GAAP diluted ear짯nings per share was $1.29 com짯pared to $0.64 in the pri짯or year.
  • Ope짯ra짯ting cash flow was $1.07 bil짯li짯on for the year com짯pared to $493 mil짯li짯on in the pri짯or year. Free cash flow was $777 mil짯li짯on for the year com짯pared to $276 mil짯li짯on in the pri짯or year.

Recent PR Highlights

  • At CES 2021, AMD announ짯ced the world셲 best pro짯ces짯sors for lap짯tops, the AMD Ryzen 5000 Series Mobi짯le Pro짯ces짯sors. With the 쏾en 3 core archi짯tec짯tu짯re, AMD Ryzen 5000 Series Mobi짯le Pro짯ces짯sors pro짯vi짯de unpre짯ce짯den짯ted per짯for짯mance and bat짯tery life. AMD also announ짯ced the AMD Ryzen PRO 5000 Series Mobi짯le pro짯ces짯sors for enter짯pri짯se, expec짯ted to be available in the first half of 2021.
  • AMD laun짯ched the AMD Rade짯on RX 6000 Series of GPUs for next-gene짯ra짯ti짯on PC gam짯ing, inclu짯ding the fas짯test AMD gam짯ing gra짯phics card ever, the AMD Rade짯on RX 6900 XT GPU. The new gra짯phics cards are built upon the ground짯brea짯king AMD RDNA꽓 2 gam짯ing archi짯tec짯tu짯re, which deli짯vers up to 2x hig짯her per짯for짯mance and up to 54 per짯cent hig짯her per짯for짯mance-per-watt com짯pared to Rade짯on gra짯phics cards built on AMD RDNA architecture.
  • AMD publicly demons짯tra짯ted the 3rd Gene짯ra짯ti짯on AMD EPYC pro짯ces짯sors, code짯na짯med 쏮ilan, for the first time at CES 2021. Run짯ning WRF, a tool for cli짯ma짯te rese짯arch and wea짯ther fore짯cas짯ting, the 3rd Gen AMD EPYC pro짯ces짯sor-powered ser짯ver com짯ple짯ted the fore짯cast appro짯xi짯m짯ate짯ly 68 per짯cent fas짯ter than the competition.
  • Ama짯zon Web Ser짯vices (AWSexpan짯ded its AMD-powered cloud offe짯rings with the new Ama짯zon Ela짯s짯tic Com짯pu짯te Cloud (EC2) G4ad ins짯tances for gra짯phics-opti짯mi짯zed workloads. Using 2nd Gen AMD EPYC CPUs and AMD Rade짯on Pro V520 GPUs, the ins짯tances deli짯ver up to 40 per짯cent bet짯ter gra짯phics per짯for짯mance com짯pared to exis짯ting AWS GPU offerings.
  • Micro짯soft Azu짯re is using 2nd Gen AMD EPYC pro짯ces짯sors to power its HBv2 vir짯tu짯al machi짯nes (VMs) for high per짯for짯mance com짯pu짯ting (HPC) workloads and announ짯ced plans to uti짯li짯ze the upco짯ming 3rd gene짯ra짯ti짯on AMD EPYC pro짯ces짯sors for future HB-series VM pro짯ducts for HPC.
  • HPE, CSC Fin짯land and EuroHPC intro짯du짯ced the upco짯ming pre-exas짯ca짯le LUMI super짯com짯pu짯ter in Fin짯land, which will be powered by AMD EPYC CPUs and AMD Instinct꽓 acce짯le짯ra짯tors. LUMI is expec짯ted to deli짯ver 551 peta짯flops of per짯for짯mance when it comes online in 2021. 
  • AMD announ짯ced the AMD Instinct MI100 acce짯le짯ra짯tor, built on the all-new AMD CDNA archi짯tec짯tu짯re. The MI100 is the world셲 fas짯test HPC GPU for sci짯en짯ti짯fic rese짯arch and is sup짯port짯ed by new acce짯le짯ra짯ted com짯pu짯te plat짯forms from Dell, GIGABYTEHPE and Supermicro. 
  • IBM and AMD announ짯ced a mul짯ti-year joint deve짯lo짯p짯ment agree짯ment to dri짯ve con짯fi짯den짯ti짯al com짯pu짯ting in hybrid cloud envi짯ron짯ments through open source soft짯ware, open stan짯dards and open sys짯tem architectures. 

Cur짯rent Outlook

AMD셲 out짯look state짯ments are based on cur짯rent expec짯ta짯ti짯ons. The fol짯lo짯wing state짯ments are for짯ward-loo짯king and actu짯al results could dif짯fer mate짯ri짯al짯ly depen짯ding on mar짯ket con짯di짯ti짯ons and the fac짯tors set forth under 쏞au짯tio짯na짯ry State짯ment below.
For the first quar짯ter of 2021, AMD expects reve짯nue to be appro짯xi짯m짯ate짯ly $3.2 bil짯li짯on, plus or minus $100 mil짯li짯on, an increase of appro짯xi짯m짯ate짯ly 79 per짯cent year-over-year and down 1 per짯cent sequen짯ti짯al짯ly. The year-over-year increase is expec짯ted to be dri짯ven by growth in all busi짯nesses. AMD expects non-GAAP gross mar짯gin to be appro짯xi짯m짯ate짯ly 46 per짯cent in the first quar짯ter of 2021.

For the full year 2021, AMD expects reve짯nue growth of appro짯xi짯m짯ate짯ly 37 per짯cent over 2020 dri짯ven by growth in all busi짯nesses. AMD expects non-GAAP gross mar짯gin to be appro짯xi짯m짯ate짯ly 47 per짯cent for 2021.

AMD Tele짯con짯fe짯rence

AMD will hold a con짯fe짯rence call for the finan짯cial com짯mu짯ni짯ty at 2:00 p.m. PT (5:00 p.m. ET) today to dis짯cuss its fourth quar짯ter and full year 2020 finan짯cial results. AMD will pro짯vi짯de a real-time audio broad짯cast of the tele짯con짯fe짯rence on the Inves짯tor Rela짯ti짯ons page of its web짯site at www.amd.com. The web짯cast will be available for 12 months after the con짯fe짯rence call. 

         
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES        
(In mil짯li짯ons, except per share data) (Unau짯di짯ted)        
    Three Months Ended   Year Ended
    Decem짯ber 26,
2020
  Sep짯tem짯ber 26,
2020
  Decem짯ber 28,
2019
  Decem짯ber 26,
2020
  Decem짯ber 28,
2019
GAAP gross profit   $ 1,451      $ 1,230      $ 949      $ 4,347      $ 2,868   
GAAP gross margin %   45  %   44  %   45  %   45  %   43  %
Stock-based com짯pen짯sa짯ti짯on   1     1     1     6     6  
Non-GAAP gross profit   $ 1,452      $ 1,231      $ 950      $ 4,353      $ 2,874   
Non-GAAP gross margin %   45  %   44  %   45  %   45  %   43  %
                     
GAAP ope짯ra짯ting expenses   $ 881      $ 781      $ 601      $ 2,978      $ 2,297   
GAAP ope짯ra짯ting expenses/revenue %   27  %   28  %   28  %   31  %   34  %
Stock-based com짯pen짯sa짯ti짯on   78     75     56     268     191  
Loss con짯tin짯gen짯cy on legal matter                   12  
Acqui짯si짯ti짯on-rela짯ted costs   14             14      
Non-GAAP ope짯ra짯ting expenses   $ 789      $ 706      $ 545      $ 2,696      $ 2,094   
Non-GAAP ope짯ra짯ting expenses/revenue%   24  %   25  %   26  %   28  %   31  %
                     
GAAP ope짯ra짯ting income   $ 570      $ 449      $ 348      $ 1,369      $ 631   
GAAP ope짯ra짯ting margin %   18  %   16  %   16  %   14  %   %
Stock-based com짯pen짯sa짯ti짯on   79     76     57     274     197  
Loss con짯tin짯gen짯cy on legal matter                   12  
Acqui짯si짯ti짯on-rela짯ted costs   14             14      
Non-GAAP ope짯ra짯ting income   $ 663      $ 525      $ 405      $ 1,657      $ 840   
Non-GAAP ope짯ra짯ting margin %   20  %   19  %   19  %   17  %   12  %
                               
    Three Months Ended   Year Ended
    Decem짯ber 26,
2020
  Sep짯tem짯ber 26,
2020
  Decem짯ber 28,
2019
  Decem짯ber 26,
2020
  Decem짯ber 28,
2019
GAAP net inco짯me / ear짯nings per share   $ 1,781      $ 1.45      $ 390      $ 0.32      $ 170      $ 0.15      $ 2,490      $ 2.06      $ 341      $ 0.30   
Loss on debt redemption/conversion   16     0.01     38     0.03     128     0.10     54     0.04     176     0.15  
Non-cash inte짯rest expen짯se rela짯ted to con짯ver짯ti짯ble debt           2         4         6         22     0.02  
Stock-based com짯pen짯sa짯ti짯on   79     0.06     76     0.06     57     0.05     274     0.22     197     0.16  
Equi짯ty inco짯me in investee   (3 )       (1 )               (5 )            
Loss con짯tin짯gen짯cy on legal matter                                   12     0.01  
Acqui짯si짯ti짯on-rela짯ted costs   14     0.01                     14     0.01          
Release of valua짯ti짯on allo짯wan짯ce on defer짯red tax assets   (1,301 )   (1.06 )                   (1,301 )   (1.07 )        
Inco짯me tax pro짯vi짯si짯on (bene짯fit)   50     0.05     (4 )       24     0.02     43     0.03     8      
Non-GAAP net inco짯me / ear짯nings per share   $ 636      $ 0.52      $ 501      $ 0.41      $ 383      $ 0.32      $ 1,575      $ 1.29      $ 756      $ 0.64   
                                                                                 
Shares used and net inco짯me adjus짯t짯ment in ear짯nings per share cal짯cu짯la짯ti짯on (1)                                                                                
Shares used in per share cal짯cu짯la짯ti짯on (GAAP)     1,226       1,215       1,188       1,207       1,120  
Inte짯rest expen짯se add-back to GAAP net income   $     $ 1     $ 4     $ 1     $  
Shares used in per share cal짯cu짯la짯ti짯on (Non-GAAP)     1,232       1,230       1,216       1,228       1,209  
Inte짯rest expen짯se add-back to Non-GAAP net income   $     $ 1     $ 2     $ 4     $ 16  
(1) For the three months ended Decem짯ber 26, 2020, Sep짯tem짯ber 26, 2020 and Decem짯ber 28, 2019, GAAP diluted EPS cal짯cu짯la짯ti짯ons include 3 mil짯li짯on, 11 mil짯li짯on and 31 mil짯li짯on shares, respec짯tively, rela짯ted to the assu짯med con짯ver짯si짯on of the Company셲 2026 Con짯ver짯ti짯ble Notes and the asso짯cia짯ted $0 mil짯li짯on, $1 mil짯li짯on and $4 mil짯li짯on inte짯rest expen짯se, respec짯tively, add-back to net inco짯me under the 쐇f con짯ver짯ted method.
   
  For the year ended Decem짯ber 26, 2020, GAAP diluted EPS cal짯cu짯la짯ti짯ons include 3 mil짯li짯on shares rela짯ted to the assu짯med con짯ver짯si짯on of the Company셲 2026 Con짯ver짯ti짯ble Notes and the asso짯cia짯ted $1 mil짯li짯on inte짯rest expen짯se add-back to net inco짯me under the 쐇f con짯ver짯ted method. For the year ended Decem짯ber 28, 2019, 89 mil짯li짯on shares rela짯ted to the assu짯med con짯ver짯si짯on of the Company셲 2026 Con짯ver짯ti짯ble Notes were not included in the GAAP diluted EPS cal짯cu짯la짯ti짯ons as their inclu짯si짯on would have been anti-dilutive.
   
  For the three months ended Decem짯ber 26, 2020, Sep짯tem짯ber 26, 2020 and Decem짯ber 28, 2019, Non-GAAP diluted EPS cal짯cu짯la짯ti짯ons include 9 mil짯li짯on, 26 mil짯li짯on and 59 mil짯li짯on shares, respec짯tively, rela짯ted to the assu짯med con짯ver짯si짯on of the Company셲 2026 Con짯ver짯ti짯ble Notes and the asso짯cia짯ted $0 mil짯li짯on, $1 mil짯li짯on and $2 mil짯li짯on inte짯rest expen짯se, respec짯tively, add-back to net inco짯me under the 쐇f con짯ver짯ted method.
   
  For the year ended Decem짯ber 26, 2020 and Decem짯ber 28, 2019, Non-GAAP diluted EPS cal짯cu짯la짯ti짯ons include 24 mil짯li짯on and 89 mil짯li짯on shares, respec짯tively, rela짯ted to the assu짯med con짯ver짯si짯on of the Company셲 2026 Con짯ver짯ti짯ble Notes and the asso짯cia짯ted $4 mil짯li짯on and $16 mil짯li짯on inte짯rest expen짯se, respec짯tively, add-back to net inco짯me under the 쐇f con짯ver짯ted method.
   

About AMD

For more than 50 years, AMD has dri짯ven inno짯va짯ti짯on in high-per짯for짯mance com짯pu짯ting, gra짯phics and visua짯liza짯ti짯on tech짯no짯lo짯gies the buil짯ding blocks for gam짯ing, immersi짯ve plat짯forms and the data cen짯ter. Hundreds of mil짯li짯ons of con짯su짯mers, lea짯ding For짯tu짯ne 500 busi짯nesses and cut짯ting-edge sci짯en짯ti짯fic rese짯arch faci짯li짯ties around the world rely on AMD tech짯no짯lo짯gy dai짯ly to impro짯ve how they live, work and play. AMD employees around the world are focu짯sed on buil짯ding gre짯at pro짯ducts that push the boun짯da짯ries of what is pos짯si짯ble. For more infor짯ma짯ti짯on about how AMD is enab짯ling today and inspi짯ring tomor짯row, visit the AMD (NASDAQ: AMDweb짯siteblogFace짯book and Twit짯ter pages.

Cau짯tio짯na짯ry Statement

This press release con짯ta짯ins for짯ward-loo짯king state짯ments con짯cer짯ning Advan짯ced Micro Devices, Inc. (AMD) such as AMD셲 strong growth oppor짯tu짯ni짯ties; the fea짯tures, func짯tion짯a짯li짯ty, per짯for짯mance, avai짯la짯bi짯li짯ty, timing and expec짯ted bene짯fits of AMD pro짯ducts; and AMD셲 expec짯ted first quar짯ter 2021 and fis짯cal 2021 finan짯cial out짯look, inclu짯ding reve짯nue and non-GAAP gross mar짯gin and expec짯ted dri짯vers based on cur짯rent expec짯ta짯ti짯ons which are made pur짯su짯ant to the Safe Har짯bor pro짯vi짯si짯ons of the Pri짯va짯te Secu짯ri짯ties Liti짯ga짯ti짯on Reform Act of 1995. For짯ward-loo짯king state짯ments are com짯mon짯ly iden짯ti짯fied by words such as 쐗ould, 쐌ay, 쐃xpects, 쐀elie짯ves, 쐏lans, 쐇ntends, 쐏ro짯jects and other terms with simi짯lar mea짯ning. Inves짯tors are cau짯tio짯ned that the for짯ward-loo짯king state짯ments in this press release are based on cur짯rent beliefs, assump짯ti짯ons and expec짯ta짯ti짯ons, speak only as of the date of this press release and invol짯ve risks and uncer짯tain짯ties that could cau짯se actu짯al results to dif짯fer mate짯ri짯al짯ly from cur짯rent expec짯ta짯ti짯ons. Such state짯ments are sub짯ject to cer짯tain known and unknown risks and uncer짯tain짯ties, many of which are dif짯fi짯cult to pre짯dict and gene짯ral짯ly bey짯ond AMD셲 con짯trol, that could cau짯se actu짯al results and other future events to dif짯fer mate짯ri짯al짯ly from tho짯se expres짯sed in, or impli짯ed or pro짯jec짯ted by, the for짯ward-loo짯king infor짯ma짯ti짯on and state짯ments. Mate짯ri짯al fac짯tors that could cau짯se actu짯al results to dif짯fer mate짯ri짯al짯ly from cur짯rent expec짯ta짯ti짯ons include, wit짯hout limi짯ta짯ti짯on, the fol짯lo짯wing: Intel Corporation셲 domi짯nan짯ce of the micro짯pro짯ces짯sor mar짯ket and its aggres짯si짯ve busi짯ness prac짯ti짯ces; the abili짯ty of third par짯ty manu짯fac짯tu짯r짯ers to manu짯fac짯tu짯re AMD셲 pro짯ducts on a time짯ly basis in suf짯fi짯ci짯ent quan짯ti짯ties and using com짯pe짯ti짯ti짯ve tech짯no짯lo짯gies; expec짯ted manu짯fac짯tu짯ring yields for AMD셲 pro짯ducts; the avai짯la짯bi짯li짯ty of essen짯ti짯al equip짯ment, mate짯ri짯als or manu짯fac짯tu짯ring pro짯ces짯ses; AMD셲 abili짯ty to intro짯du짯ce pro짯ducts on a time짯ly basis with fea짯tures and per짯for짯mance levels that pro짯vi짯de value to its cus짯to짯mers; glo짯bal eco짯no짯mic uncer짯tain짯ty; the loss of a signi짯fi짯cant cus짯to짯mer; AMD셲 abili짯ty to gene짯ra짯te reve짯nue from its semi-cus짯tom SoC pro짯ducts;  the impact of the COVID-19 pan짯de짯mic on AMD셲 busi짯ness, finan짯cial con짯di짯ti짯on and results of ope짯ra짯ti짯ons; poli짯ti짯cal, legal, eco짯no짯mic risks and natu짯ral dis짯as짯ters; the impact of govern짯ment actions and regu짯la짯ti짯ons such as export admi짯nis짯tra짯ti짯on regu짯la짯ti짯ons, tariffs and trade pro짯tec짯tion mea짯su짯res; the impact of acqui짯si짯ti짯ons, joint ven짯tures and/or invest짯ments on AMD셲 busi짯ness, inclu짯ding the announ짯ced acqui짯si짯ti짯on of Xilinx, Inc. (Xilinx), and the fail짯ure to inte짯gra짯te acqui짯red busi짯nesses; AMD셲 abili짯ty to com짯ple짯te the Xilinx mer짯ger; the impact of the announce짯ment and pen짯den짯cy of the Xilinx mer짯ger on AMD셲 busi짯ness; poten짯ti짯al secu짯ri짯ty vul짯nerabi짯li짯ties; poten짯ti짯al IT outa짯ges, data loss, data brea짯ches and cyber-attacks; uncer짯tain짯ties invol짯ving the orde짯ring and ship짯ment of AMD셲 pro짯ducts; quar짯ter짯ly and sea짯so짯nal sales pat짯terns; the rest짯ric짯tions impo짯sed by agree짯ments gover짯ning AMD셲 notes and the revol짯ving cre짯dit faci짯li짯ty; the com짯pe짯ti짯ti짯ve mar짯kets in which AMD셲 pro짯ducts are sold; mar짯ket con짯di짯ti짯ons of the indus짯tries in which AMD pro짯ducts are sold; AMD셲 reli짯ance on third-par짯ty intellec짯tu짯al pro짯per짯ty to design and intro짯du짯ce new pro짯ducts in a time짯ly man짯ner; AMD셲 reli짯ance on third-par짯ty com짯pa짯nies for the design, manu짯fac짯tu짯re and sup짯p짯ly of mother짯boards, soft짯ware and other com짯pu짯ter plat짯form com짯pon짯ents; AMD셲 reli짯ance on Micro짯soft Cor짯po짯ra짯ti짯on and other soft짯ware ven짯dors sup짯port to design and deve짯lop soft짯ware to run on AMD셲 pro짯ducts; AMD셲 reli짯ance on third-par짯ty dis짯tri짯bu짯tors and add-in-board part짯ners; the poten짯ti짯al dilu짯ti짯ve effect if the 2.125% Con짯ver짯ti짯ble Seni짯or Notes due 2026 are con짯ver짯ted; future impairm짯ents of good짯will and tech짯no짯lo짯gy licen짯se purcha짯ses; AMD셲 abili짯ty to attract and retain qua짯li짯fied per짯son짯nel; AMD셲 abili짯ty to gene짯ra짯te suf짯fi짯ci짯ent reve짯nue and ope짯ra짯ting cash flow or obtain exter짯nal finan짯cing for rese짯arch and deve짯lo짯p짯ment or other stra짯te짯gic invest짯ments; AMD셲 indeb짯ted짯ness; AMD셲 abili짯ty to gene짯ra짯te suf짯fi짯ci짯ent cash to ser짯vice its debt obli짯ga짯ti짯ons or meet its working capi짯tal requi짯re짯ments; AMD셲 abili짯ty to repurcha짯se its out짯stan짯ding debt in the event of a chan짯ge of con짯trol; the cycli짯cal natu짯re of the semi짯con짯duc짯tor indus짯try; the impact of modi짯fi짯ca짯ti짯on or inter짯rup짯ti짯on of AMD셲 inter짯nal busi짯ness pro짯ces짯ses and infor짯ma짯ti짯on sys짯tems; com짯pa짯ti짯bi짯li짯ty of AMD셲 pro짯ducts with some or all indus짯try-stan짯dard soft짯ware and hard짯ware; cos짯ts rela짯ted to defec짯ti짯ve pro짯ducts; the effi짯ci짯en짯cy of AMD셲 sup짯p짯ly chain; AMD셲 abili짯ty to rely on third par짯ty sup짯p짯ly-chain logi짯stics func짯tions; AMD셲 stock pri짯ce vola짯ti짯li짯ty; world짯wi짯de poli짯ti짯cal con짯di짯ti짯ons; unfa짯vorable cur짯ren짯cy exch짯an짯ge rate fluc짯tua짯tions; AMD셲 abili짯ty to effec짯tively con짯trol the sales of its pro짯ducts on the gray mar짯ket; AMD셲 abili짯ty to ade짯qua짯te짯ly pro짯tect its tech짯no짯lo짯gy or other intellec짯tu짯al pro짯per짯ty; cur짯rent and future claims and liti짯ga짯ti짯on; poten짯ti짯al tax lia짯bi짯li짯ties; and the impact of envi짯ron짯men짯tal laws, con짯flict mine짯rals-rela짯ted pro짯vi짯si짯ons and other laws or regu짯la짯ti짯ons. Inves짯tors are urged to review in detail the risks and uncer짯tain짯ties in AMD셲 Secu짯ri짯ties and Exch짯an짯ge Com짯mis짯si짯on filings, inclu짯ding but not limi짯t짯ed to AMD셲 Quar짯ter짯ly Report on Form 10멡 for the quar짯ter ended Sep짯tem짯ber 26, 2020.

(*) In this ear짯nings press release, in addi짯ti짯on to GAAP finan짯cial results, AMD has pro짯vi짯ded non-GAAP finan짯cial mea짯su짯res inclu짯ding non-GAAP gross mar짯gin, non-GAAP ope짯ra짯ting expen짯ses, non-GAAP ope짯ra짯ting inco짯me, non-GAAP net inco짯me and non-GAAP ear짯nings per share. AMD uses a nor짯ma짯li짯zed tax rate in its com짯pu짯ta짯ti짯on of the non-GAAP inco짯me tax pro짯vi짯si짯on to pro짯vi짯de bet짯ter con짯sis짯ten짯cy across the report짯ing peri짯ods. For full year 2020, AMD uses a non-GAAP tax rate of 3%, which excludes the direct tax impacts of pre-tax non-GAAP adjus짯t짯ments. AMD also pro짯vi짯ded adjus짯ted EBITDA and free cash flow as sup짯ple짯men짯tal non-GAAP mea짯su짯res of its per짯for짯mance. The짯se items are defi짯ned in the foot짯no짯tes to the sel짯ec짯ted cor짯po짯ra짯te data tables pro짯vi짯ded at the end of this ear짯nings press release. AMD is pro짯vi짯ding the짯se finan짯cial mea짯su짯res becau짯se it belie짯ves this non-GAAP pre짯sen짯ta짯ti짯on makes it easier for inves짯tors to compa짯re its ope짯ra짯ting results for cur짯rent and his짯to짯ri짯cal peri짯ods and also becau짯se AMD belie짯ves it assists inves짯tors in com짯pa짯ring AMD셲 per짯for짯mance across report짯ing peri짯ods on a con짯sis짯tent basis by exclu짯ding items that it does not belie짯ve are indi짯ca짯ti짯ve of its core ope짯ra짯ting per짯for짯mance and for the other reasons descri짯bed in the foot짯no짯tes to the sel짯ec짯ted data tables. The non-GAAP finan짯cial mea짯su짯res dis짯c짯lo짯sed in this ear짯nings press release should be view짯ed in addi짯ti짯on to and not as a sub짯sti짯tu짯te for or supe짯ri짯or to AMD셲 repor짯ted results pre짯pared in accordance with GAAP and should be read only in con짯junc짯tion with AMD셲 Con짯so짯li짯da짯ted Finan짯cial State짯ments pre짯pared in accordance with GAAP. The짯se non-GAAP finan짯cial mea짯su짯res refe짯ren짯ced are recon짯ci짯led to their most direct짯ly com짯pa짯ra짯ble GAAP finan짯cial mea짯su짯res in the data tables at the end of this ear짯nings press release. This ear짯nings press release also con짯ta짯ins for짯ward-loo짯king non-GAAP gross mar짯gin con짯cer짯ning AMD셲 finan짯cial out짯look, which is based on cur짯rent expec짯ta짯ti짯ons as of Janu짯ary 26, 2021 and assump짯ti짯ons and beliefs that invol짯ve num짯e짯rous risks and uncer짯tain짯ties. AMD under짯ta짯kes no intent or obli짯ga짯ti짯on to publicly update or revi짯se its out짯look state짯ments as a result of new infor짯ma짯ti짯on, future events or other짯wi짯se, except as may be requi짯red by law.


AMD, the AMD Arrow logo, EPYC, Rade짯on, Ryzen, Instinct, Thre짯ad짯rip짯per and com짯bi짯na짯ti짯ons the짯reof, are trade짯marks of Advan짯ced Micro Devices, Inc. Other names are for infor짯ma짯tio짯nal pur짯po짯ses only and used to iden짯ti짯fy com짯pa짯nies and pro짯ducts and may be trade짯marks of their respec짯ti짯ve owner.

ADVANCED MICRO DEVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Mil짯li짯ons except per share amounts and per짯cen짯ta짯ges) (Unau짯di짯ted)
 
    Three Months Ended   Year Ended
    Decem짯ber 26,
2020
  Sep짯tem짯ber 26,
2020
  Decem짯ber 28,
2019
  Decem짯ber 26,
2020
  Decem짯ber 28,
2019
Net reve짯nue   $ 3,244        $ 2,801        $ 2,127        $ 9,763        $ 6,731     
Cost of sales   1,793        1,571        1,178        5,416        3,863     
Gross pro짯fit   1,451        1,230        949        4,347        2,868     
Gross mar짯gin %   45    %   44    %   45    %   45    %   43    %
Rese짯arch and development   573        508        395        1,983        1,547     
Mar짯ke짯ting, gene짯ral and administrative   308        273        206        995        750     
Licen짯sing gain                                   (60 )  
Ope짯ra짯ting income   570        449        348        1,369        631     
Inte짯rest expense   (9 )     (11 )     (18 )     (47 )     (94 )  
Other expen짯se, net   (15 )     (37 )     (125 )     (47 )     (165 )  
Inco짯me befo짯re inco짯me taxes and equi짯ty income   546        401        205        1,275        372     
Inco짯me tax pro짯vi짯si짯on (bene짯fit)   (1,232 )     12        35        (1,210 )     31     
Equi짯ty inco짯me in investee                                  
Net Inco짯me   $ 1,781        $ 390        $ 170        $ 2,490        $ 341     
Ear짯nings per share                    
Basic   $ 1.48        $ 0.33        $ 0.15        $ 2.10        $ 0.31     
Diluted   $ 1.45        $ 0.32        $ 0.15        $ 2.06        $ 0.30     
Shares used in per share calculation                    
Basic   1,205        1,184        1,140        1,184        1,091     
Diluted   1,226        1,215        1,188        1,207        1,120     
                                         
ADVANCED MICRO DEVICES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Mil짯li짯ons) (Unau짯di짯ted)
                 
    Decem짯ber 26,
2020
  Decem짯ber 28,
2019
ASSETS        
Cur짯rent assets:        
Cash and cash equivalents   $ 1,595     $ 1,466  
Short-term invest짯ments   695     37  
Accounts receiva짯ble, net   2,066     1,859  
Invent짯ories   1,399     982  
Receiv짯a짯bles from rela짯ted parties   10     20  
Pre짯paid expen짯ses and other cur짯rent assets   378     233  
Total cur짯rent assets   6,143     4,597  
Pro짯per짯ty and equip짯ment, net   641     500  
Ope짯ra짯ting lea짯se right-of-use assets   208     205  
Good짯will   289     289  
Invest짯ment: equi짯ty method   63     58  
Defer짯red tax assets   1,245     22  
Other non-cur짯rent assets   373     357  
Total Assets   $ 8,962     $ 6,028  
         
LIABILITIES AND STOCKHOLDERS EQUITY        
Cur짯rent liabilities:        
Accounts paya짯ble   468     988  
Paya짯bles to rela짯ted parties   78     213  
Accrued lia짯bi짯li짯ties   1,796     1,084  
Other cur짯rent liabilities   75     74  
Total cur짯rent liabilities   2,417     2,359  
Long-term debt, net   330     486  
Long-term ope짯ra짯ting lea짯se liabilities   201     199  
Other long-term liabilities   177     157  
         
Stock짯hol짯ders equity:        
Capi짯tal stock:        
Com짯mon stock, par value   12     12  
Addi짯tio짯nal paid-in capital   10,544     9,963  
Tre짯asu짯ry stock, at cost   (131 )   (53 )
Accu짯mu짯la짯ted deficit   (4,605 )   (7,095 )
Accu짯mu짯la짯ted other com짯pre짯hen짯si짯ve income   17      
Total stock짯hol짯ders equity   $ 5,837     $ 2,827  
Total Lia짯bi짯li짯ties and Stock짯hol짯ders equity   $ 8,962     $ 6,028  
                 
ADVANCED MICRO DEVICES, INC.
SELECTED CASH FLOW INFORMATION
(Mil짯li짯ons) (Unau짯di짯ted)
 
    Three Months Ended   Year Ended
    Decem짯ber 26,
2020
  Sep짯tem짯ber 26,
2020
  Decem짯ber 28,
2019
  Decem짯ber 26,
2020
  Decem짯ber 28,
2019
Net cash pro짯vi짯ded by (used in)                    
Ope짯ra짯ting activities   $ 554     $ 339     $ 442     $ 1,071     $ 493  
Inves짯t짯ing activities   $ (294 )   $ (549 )   $ (26 )   $ (952 )   $ (149 )
Finan짯cing activities   $ 35     $ (269 )   $ (107 )   $ 6     $ 43  
                                         
SELECTED CORPORATE DATA
(Mil짯li짯ons) (Unau짯di짯ted)
 
    Three Months Ended   Year Ended
    Decem짯ber 26,
2020
  Sep짯tem짯ber 26,
2020
  Decem짯ber 28,
2019
  Decem짯ber 26,
2020
  Decem짯ber 28,
2019
Seg짯ment and Cate짯go짯ry Information                    
Com짯pu짯ting and Gra짯phics(1)                    
Net reve짯nue   $ 1,960     $ 1,667     $ 1,662     $ 6,432     $ 4,709  
Ope짯ra짯ting income   $ 420     $ 384     $ 360     $ 1,266     $ 577  
Enter짯pri짯se, Embedded and Semi-Cus짯tom(2)                    
Net reve짯nue   $ 1,284     $ 1,134     $ 465     $ 3,331     $ 2,022  
Ope짯ra짯ting income   $ 243     $ 141     $ 45     $ 391     $ 263  
All Other(3)                    
Net reve짯nue   $     $     $     $     $  
Ope짯ra짯ting loss   $ (93 )   $ (76 )   $ (57 )   $ (288 )   $ (209 )
Total                    
Net reve짯nue   $ 3,244      $ 2,801      $ 2,127      $ 9,763      $ 6,731   
Ope짯ra짯ting income   $ 570      $ 449      $ 348      $ 1,369      $ 631   
                                         
                                         
Other Data                                        
Capi짯tal expenditures   $ 74     $ 74     $ 42     $ 294     $ 217  
Adjus짯ted EBITDA(4)   $ 753     $ 607     $ 469     $ 1,969     $ 1,062  
Cash, cash equi짯va짯lents and short-term investments   $ 2,290     $ 1,771     $ 1,503     $ 2,290     $ 1,503  
Free cash flow(5)   $ 480     $ 265     $ 400     $ 777     $ 276  
Total assets   $ 8,962     $ 7,023     $ 6,028     $ 8,962     $ 6,028  
Total debt   $ 330     $ 373     $ 486     $ 330     $ 486  
(1) The Com짯pu짯ting and Gra짯phics seg짯ment, which pri짯ma짯ri짯ly includes desk짯top and note짯book pro짯ces짯sors and chip짯sets, dis짯crete and inte짯gra짯ted gra짯phics pro짯ces짯sing units (GPUs), data cen짯ter and pro짯fes짯sio짯nal GPUs and deve짯lo짯p짯ment ser짯vices. From time to time, the Com짯pa짯ny may also sell or licen짯se por짯ti짯ons of its IP portfolio.
   
(2) The Enter짯pri짯se, Embedded and Semi-Cus짯tom seg짯ment, which pri짯ma짯ri짯ly includes ser짯ver and embedded pro짯ces짯sors, semi-cus짯tom Sys짯tem-on-Chip (SoC) pro짯ducts, deve짯lo짯p짯ment ser짯vices and tech짯no짯lo짯gy for game con짯so짯les. From time to time, the Com짯pa짯ny may also sell or licen짯se por짯ti짯ons of its IP portfolio.
   
(3) All Other cate짯go짯ry pri짯ma짯ri짯ly includes cer짯tain expen짯ses and cre짯dits that are not allo짯ca짯ted to any of the ope짯ra짯ting seg짯ments. Also included in this cate짯go짯ry is stock-based com짯pen짯sa짯ti짯on expen짯se and acqui짯si짯ti짯on-rela짯ted costs.
   
(4) Recon짯ci짯lia짯ti짯on of GAAP Net Inco짯me to Adjus짯ted EBITDA*
    Three Months Ended   Year Ended
    Decem짯ber 26,
2020
  Sep짯tem짯ber 26,
2020
  Decem짯ber 28,
2019
  Decem짯ber 26,
2020
  Decem짯ber 28,
2019
GAAP net income   $ 1,781     $ 390     $ 170     $ 2,490     $ 341  
Inte짯rest expense   9     11     18     47     94  
Other expen짯se, net   15     37     125     47     165  
Inco짯me tax pro짯vi짯si짯on (bene짯fit)   (1,232 )   12     35     (1,210 )   31  
Equi짯ty inco짯me in investee   (3 )   (1 )       (5 )    
Stock-based com짯pen짯sa짯ti짯on   79     76     57     274     197  
Depre짯cia짯ti짯on and amortization   90     82     64     312     222  
Acqui짯si짯ti짯on-rela짯ted costs   14             14      
Loss con짯tin짯gen짯cy on legal matter                   12  
Adjus짯ted EBITDA   $ 753     $ 607     $ 469     $ 1,969     $ 1,062  
                                         

(5) Free Cash Flow Reconciliation**

    Three Months Ended   Year Ended
    Decem짯ber 26,
2020
  Sep짯tem짯ber 26,
2020
  Decem짯ber 28,
2019
  Decem짯ber 26,
2020
  Decem짯ber 28,
2019
GAAP net cash pro짯vi짯ded by ope짯ra짯ting activities   $ 554     $ 339     $ 442     $ 1,071     $ 493  
Purcha짯ses of pro짯per짯ty and equipment   (74 )   (74 )   (42 )   (294 )   (217 )
Free cash flow   $ 480     $ 265     $ 400     $ 777     $ 276  
* The Com짯pa짯ny pres짯ents 쏛djus짯ted EBITDA as a sup짯ple짯men짯tal mea짯su짯re of its per짯for짯mance. Adjus짯ted EBITDA for the Com짯pa짯ny is deter짯mi짯ned by adjus짯ting GAAP net inco짯me for inte짯rest expen짯se, other expen짯se, net, inco짯me tax pro짯vi짯si짯on (bene짯fit), equi짯ty inco짯me on inves짯tee, stock-based com짯pen짯sa짯ti짯on, and depre짯cia짯ti짯on and amor짯tiza짯ti짯on expen짯se. The Com짯pa짯ny also included acqui짯si짯ti짯on-rela짯ted cos짯ts for the quar짯ter and the year ended Decem짯ber 26, 2020, and a loss con짯tin짯gen짯cy on legal mat짯ter for the year ended Decem짯ber 28, 2019. The Com짯pa짯ny cal짯cu짯la짯tes and pres짯ents Adjus짯ted EBITDA becau짯se manage짯ment belie짯ves it is of importance to inves짯tors and len짯ders in rela짯ti짯on to its over짯all capi짯tal struc짯tu짯re and its abili짯ty to bor짯row addi짯tio짯nal funds. In addi짯ti짯on, the Com짯pa짯ny pres짯ents Adjus짯ted EBITDA becau짯se it belie짯ves this mea짯su짯re assists inves짯tors in com짯pa짯ring its per짯for짯mance across report짯ing peri짯ods on a con짯sis짯tent basis by exclu짯ding items that the Com짯pa짯ny does not belie짯ve are indi짯ca짯ti짯ve of its core ope짯ra짯ting per짯for짯mance. The Company셲 cal짯cu짯la짯ti짯on of Adjus짯ted EBITDA may or may not be con짯sis짯tent with the cal짯cu짯la짯ti짯on of this mea짯su짯re by other com짯pa짯nies in the same indus짯try. Inves짯tors should not view Adjus짯ted EBITDA as an alter짯na짯ti짯ve to the GAAP ope짯ra짯ting mea짯su짯re of inco짯me or GAAP liqui짯di짯ty mea짯su짯res of cash flows from ope짯ra짯ting, inves짯t짯ing and finan짯cing acti짯vi짯ties. In addi짯ti짯on, Adjus짯ted EBITDA does not take into account chan짯ges in cer짯tain assets and lia짯bi짯li짯ties that can affect cash flows.
   
** The Com짯pa짯ny also pres짯ents free cash flow as a sup짯ple짯men짯tal Non-GAAP mea짯su짯re of its per짯for짯mance. Free cash flow is deter짯mi짯ned by adjus짯ting GAAP net cash pro짯vi짯ded by ope짯ra짯ting acti짯vi짯ties for capi짯tal expen짯dit짯ures. The Com짯pa짯ny cal짯cu짯la짯tes and com짯mu짯ni짯ca짯tes free cash flow in the finan짯cial ear짯nings press release becau짯se manage짯ment belie짯ves it is of importance to inves짯tors to under짯stand the natu짯re of the짯se cash flows. The Company셲 cal짯cu짯la짯ti짯on of free cash flow may or may not be con짯sis짯tent with the cal짯cu짯la짯ti짯on of this mea짯su짯re by other com짯pa짯nies in the same indus짯try. Inves짯tors should not view free cash flow as an alter짯na짯ti짯ve to GAAP liqui짯di짯ty mea짯su짯res of cash flows from ope짯ra짯ting activities.
   
  The Com짯pa짯ny has pro짯vi짯ded recon짯ci짯lia짯ti짯ons within the ear짯nings press release of the짯se Non-GAAP finan짯cial mea짯su짯res to the most direct짯ly com짯pa짯ra짯ble GAAP finan짯cial measures.

Media Cont짯act:
Drew Prai짯rie
AMD Communications
512602-4425
drew.prairie@amd.com

Inves짯tor Contact:
Lau짯ra Graves
AMD Inves짯tor Relations
408749-5467
laura.graves@amd.com