AMD Reports First Quarter 2021 Financial Results

— Reve­nue grew 93 per­cent while net inco­me and EPS tripled year-over-year —

SANTA CLARA, Calif., April 27, 2021 (GLOBE NEWSWIRE) — AMD (NASDAQ:AMD) today announ­ced reve­nue for the first quar­ter of 2021 of $3.45 bil­li­on, ope­ra­ting inco­me of $662 mil­li­on, net inco­me of $555 mil­li­on and dilu­t­ed ear­nings per share of $0.45. On a non-GAAP* basis, ope­ra­ting inco­me was $762 mil­li­on, net inco­me was $642 mil­li­on and dilu­t­ed ear­nings per share was $0.52.

GAAP Quar­ter­ly Finan­cial Results

  Q1 2021 Q1 2020 Y/Y Q4 2020 Q/Q
Reve­nue ($M) $3,445 $1,786 Up 93% $3,244 Up 6%
Gross pro­fit ($M) $1,587 $818 Up 94% $1,451 Up 9%
Gross mar­gin % 46% 46% Flat 45% Up 1pp
Ope­ra­ting expen­ses ($M) $929 $641 Up 45% $881 Up 5%
Ope­ra­ting inco­me ($M) $662 $177 Up 274% $570 Up 16%
Tax Valua­ti­on Allo­wan­ce Release Bene­fit ($M) $1,301
Net inco­me ($M) $555 $162 Up 243% $1,781 Down 69%
Ear­nings per share $0.45 $0.14 Up 221% $1.45 Down 69%

Non-GAAP* Quar­ter­ly Finan­cial Results

  Q1 2021 Q1 2020 Y/Y Q4 2020 Q/Q
Reve­nue ($M) $3,445 $1,786 Up 93% $3,244 Up 6%
Gross pro­fit ($M) $1,588 $820 Up 94% $1,452 Up 9%
Gross mar­gin % 46% 46% Flat 45% Up 1pp
Ope­ra­ting expen­ses ($M) $830 $584 Up 42% $789 Up 5%
Ope­ra­ting inco­me ($M) $762 $236 Up 223% $663 Up 15%
Net inco­me ($M) $642 $222 Up 189% $636 Up 1%
Ear­nings per share $0.52 $0.18 Up 189% $0.52 Flat

Our busi­ness con­ti­nued to acce­le­ra­te in the first quar­ter dri­ven by the best pro­duct port­fo­lio in our histo­ry, strong exe­cu­ti­on and robust mar­ket demand,” said Dr. Lisa Su, AMD pre­si­dent and CEO. “We had out­stan­ding year-over-year reve­nue growth across all of our busi­nes­ses and data cen­ter reve­nue more than dou­bled. Our incre­a­sed full-year gui­d­ance high­lights the strong growth we expect across our busi­ness based on incre­a­sing adop­ti­on of our high-per­for­mance com­pu­ting pro­ducts and expan­ding cus­to­mer relationships.”

Q1 2021 Results

  • Reve­nue was $3.45 bil­li­on, up 93 per­cent year-over-year and 6 per­cent quar­ter-over-quar­ter dri­ven by hig­her reve­nue in both the Com­pu­ting and Gra­phics and Enter­pri­se, Embed­ded and Semi-cus­tom segments.
  • Gross mar­gin was 46 per­cent, flat year-over-year and up 1 per­cen­ta­ge point quar­ter-over-quar­ter. The quar­ter-over-quar­ter incre­a­se was dri­ven by a grea­ter mix of Ryzen™, Rade­on™ and EPYC™ pro­ces­sor sales.
  • Ope­ra­ting inco­me was $662 mil­li­on com­pa­red to ope­ra­ting inco­me of $177 mil­li­on a year ago and $570 mil­li­on in the pri­or quar­ter. Non-GAAP ope­ra­ting inco­me was $762 mil­li­on com­pa­red to ope­ra­ting inco­me of $236 mil­li­on a year ago and $663 mil­li­on in the pri­or quar­ter. Ope­ra­ting inco­me impro­ve­ments were pri­ma­ri­ly dri­ven by hig­her revenue.
  • Net inco­me was $555 mil­li­on com­pa­red to net inco­me of $162 mil­li­on a year ago and $1.78 bil­li­on in the pri­or quar­ter, which inclu­ded an inco­me tax bene­fit of $1.30 bil­li­on asso­cia­ted with a valua­ti­on allo­wan­ce release. Non-GAAP net inco­me was $642 mil­li­on com­pa­red to net inco­me of $222 mil­li­on a year ago and $636 mil­li­on in the pri­or quarter.
  • Dilu­t­ed ear­nings per share was $0.45 com­pa­red to dilu­t­ed ear­nings per share of $0.14 a year ago and $1.45 in the pri­or quar­ter, which inclu­ded an inco­me tax bene­fit that con­tri­bu­t­ed $1.06 to ear­nings per share. Non-GAAP dilu­t­ed ear­nings per share was $0.52 based on a 15 per­cent effec­ti­ve tax rate com­pa­red to dilu­t­ed ear­nings per share of $0.18 a year ago and $0.52 in the pri­or quar­ter. Pri­or peri­ods had a 3 per­cent effec­ti­ve tax rate for non-GAAP results.
  • Cash, cash equi­va­lents and short-term invest­ments were $3.12 bil­li­on at the end of the quarter.

Quar­ter­ly Finan­cial Seg­ment Summary

  • Com­pu­ting and Gra­phics seg­ment reve­nue was $2.10 bil­li­on, up 46 per­cent year-over-year and 7 per­cent quar­ter-over-quar­ter pri­ma­ri­ly dri­ven by Ryzen pro­ces­sor and Rade­on gra­phics pro­duct sales growth. 
    • Cli­ent pro­ces­sor average sel­ling pri­ce (ASP) grew year-over-year and quar­ter-over-quar­ter dri­ven by a richer mix of Ryzen desk­top and note­book pro­ces­sor sales.
    • GPU ASP was hig­her year-over-year and quar­ter-over-quar­ter dri­ven by high-end Rade­on gra­phics products.
    • Ope­ra­ting inco­me was $485 mil­li­on com­pa­red to $262 mil­li­on a year ago and $420 mil­li­on in the pri­or quar­ter. The year-over-year and quar­ter-over-quar­ter incre­a­ses were pri­ma­ri­ly dri­ven by hig­her revenue.
  • Enter­pri­se, Embed­ded and Semi-Cus­tom seg­ment reve­nue was $1.35 bil­li­on, up 286 per­cent year-over-year and 5 per­cent quar­ter-over-quar­ter. The year-over-year incre­a­se was dri­ven by hig­her semi-cus­tom pro­duct sales and EPYC pro­ces­sor reve­nue. The quar­ter-over-quar­ter incre­a­se was dri­ven by hig­her EPYC pro­ces­sor sales par­ti­al­ly off­set by lower semi-cus­tom pro­duct sales. 
    • Ope­ra­ting inco­me was $277 mil­li­on com­pa­red to an ope­ra­ting loss of $26 mil­li­on a year ago and ope­ra­ting inco­me of $243 mil­li­on in the pri­or quar­ter. The year-over-year and quar­ter-over-quar­ter incre­a­ses were pri­ma­ri­ly dri­ven by hig­her revenue.
  • All Other ope­ra­ting loss was $100 mil­li­on com­pa­red to ope­ra­ting los­ses of $59 mil­li­on a year ago and $93 mil­li­on in the pri­or quarter.

Recent PR Highlights

  • AMD announ­ced the AMD EPYC 7003 seri­es pro­ces­sors inclu­ding the world’s hig­hest per­for­mance ser­ver pro­ces­sor, the AMD EPYC 7763, exten­ding AMD per-socket and per-core per­for­mance lea­ders­hip. The pro­ces­sors pro­vi­de up to two times bet­ter per­for­mance in high-per­for­mance com­pu­ting (HPC), cloud and enter­pri­se workloads com­pa­red to the com­pe­ti­ti­on, all with lea­ders­hip secu­ri­ty fea­tures. A broad set of part­ners announ­ced offe­rings based on the new EPYC 7003 seri­es processors. 
  • AMD EPYC CPUs and AMD Instinct™ GPU acce­le­ra­tors are enab­ling power­ful new solutions. 
    • HPE and the KTH Roy­al Insti­tu­te of Tech­no­lo­gy in Swe­den announ­ced a new pre-exas­ca­le super­com­pu­ter that will use next genera­ti­on AMD EPYC pro­ces­sors and AMD Instinct GPUs.
    • AMD EPYC CPUs and AMD Instinct GPUs are powe­ring expan­ded cloud-based HPC solu­ti­ons, inclu­ding Sie­mens NX and PTC Creo, both on Micro­soft Azu­re NVv4 instances.
  • AMD cus­to­mers are on track to incre­a­se the num­ber of note­books based on the AMD Ryzen 5000 Seri­es Mobi­le Pro­ces­sors and AMD Ryzen PRO 5000 Seri­es Mobi­le Pro­ces­sors by 50 per­cent com­pa­red to the pri­or genera­ti­on, as lea­ding OEMs announ­ced new sys­tems for busi­nes­ses, gamers, creators and consumers. 
    • Acer intro­du­ced the new Nitro 5 and Aspi­re fami­ly of note­books as well as the Chrome­book Spin 514, powe­red by the recent­ly announ­ced Ryzen 3000 C‑Series pro­ces­sors, the first Ryzen pro­ces­sors desi­gned for the Chro­me OS.
    • Asus unvei­led a lin­eup of AMD-powe­red gaming note­books, as well as updated AMD-powe­red note­books for con­su­mers, inclu­ding new Zen­Book, Chrome­book Flip and Vivo­Book systems.
    • HP’s latest port­fo­lio of Eli­te­Book and Pro­Book busi­ness note­books fea­ture both Ryzen Mobi­le and Ryzen PRO Mobi­le 5000 Seri­es Processors.
    • Leno­vo intro­du­ced twel­ve new Ryzen 5000 and Ryzen 5000 PRO pro­ces­sor based note­books, inclu­ding Think­Book models for com­mer­cial users, Legi­on and Ide­a­Pad gaming and Yoga notebooks.
  • AMD announ­ced the Rade­on RX 6700 XT GPU, deli­vering excep­tio­nal 1440p PC gaming expe­ri­en­ces. Built on the AMD RDNA 2 gaming archi­tec­tu­re and lea­ding edge 7nm pro­cess tech­no­lo­gy, it is desi­gned to deli­ver the opti­mal com­bi­na­ti­on of per­for­mance and power efficiency.

Cur­rent Outlook
AMD’s out­look state­ments are based on cur­rent expec­ta­ti­ons. The fol­lowing state­ments are for­ward-loo­king and actu­al results could dif­fer mate­ri­al­ly depen­ding on mar­ket con­di­ti­ons and the fac­tors set forth under “Cau­tio­na­ry State­ment” below.

For the second quar­ter of 2021, AMD expects reve­nue to be appro­xi­mate­ly $3.6 bil­li­on, plus or minus $100 mil­li­on, an incre­a­se of appro­xi­mate­ly 86 per­cent year-over-year and 4 per­cent quar­ter-over-quar­ter. The year-over-year incre­a­se is expec­ted to be dri­ven by growth in all busi­nes­ses. The quar­ter-over-quar­ter incre­a­se is expec­ted to be pri­ma­ri­ly dri­ven by growth in data cen­ter and gaming. AMD expects non-GAAP gross mar­gin to be appro­xi­mate­ly 47 per­cent in the second quar­ter of 2021.

For the full year 2021, AMD now expects reve­nue growth of appro­xi­mate­ly 50 per­cent over 2020 dri­ven by growth in all busi­nes­ses, up from pri­or gui­d­ance of appro­xi­mate­ly 37 per­cent annu­al growth.

AMD Telecon­fe­rence
AMD will hold a con­fe­rence call for the finan­cial com­mu­ni­ty at 2:00 p.m. PT (5:00 p.m. ET) today to dis­cuss its first quar­ter 2021 finan­cial results. AMD will pro­vi­de a real-time audio broad­cast of the telecon­fe­rence on the Inves­tor Rela­ti­ons page of its web­site at www.amd.com. The web­cast will be avail­ab­le for 12 mon­ths after the con­fe­rence call.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In mil­li­ons, except per share data) (Unau­di­ted) Three Mon­ths Ended
  March 27,
2021
  Decem­ber 26,
2020
  March 28,
2020
GAAP gross profit $ 1,587     $ 1,451     $ 818  
GAAP gross margin % 46 %   45 %   46 %
Stock-based com­pen­sa­ti­on 1     1     2  
Non-GAAP gross profit $ 1,588     $ 1,452     $ 820  
Non-GAAP gross margin % 46 %   45 %   46 %
           
GAAP ope­ra­ting expenses $ 929     $ 881     $ 641  
GAAP ope­ra­ting expenses/revenue % 27 %   27 %   36 %
Stock-based com­pen­sa­ti­on 84     78     57  
Acqui­si­ti­on-rela­ted costs 15     14      
Non-GAAP ope­ra­ting expenses $ 830     $ 789      $ 584  
Non-GAAP ope­ra­ting expenses/revenue% 24 %   24 %   33 %
           
GAAP ope­ra­ting income $ 662     $ 570     $ 177  
GAAP ope­ra­ting margin % 19 %   18 %   10 %
Stock-based com­pen­sa­ti­on 85     79     59  
Acqui­si­ti­on-rela­ted costs 15     14      
Non-GAAP ope­ra­ting income $ 762     $ 663     $ 236  
Non-GAAP ope­ra­ting margin % 22 %   20 %   13 %

 

    Three Mon­ths Ended
    March 27,
2021
  Decem­ber 26,
2020
  March 28,
2020
GAAP net inco­me / ear­nings per share   $ 555     $ 0.45     $ 1,781     $ 1.45     $ 162     $ 0.14  
Loss on debt redemption/conversion   6     0.01     16     0.01          
Non-cash inte­rest expen­se rela­ted to con­ver­ti­ble debt                   2      
Stock-based com­pen­sa­ti­on   85     0.07     79     0.06     59     0.04  
Equi­ty inco­me in investee   (2 )       (3 )            
Acqui­si­ti­on-rela­ted costs   15     0.01     14     0.01          
Release of valua­ti­on allo­wan­ce on defer­red tax assets           (1,301 )   (1.06 )        
Impairment of investment   8     0.01                  
Inco­me tax pro­vi­si­on (bene­fit)   (25 )   (0.03 )   50     0.05     (1 )    
Non-GAAP net inco­me / ear­nings per share   $ 642     $ 0.52     $ 636     $ 0.52     $ 222     $ 0.18  
                         
Shares used and net inco­me adjus­t­ment in
ear­nings per share cal­cu­la­ti­on (1)
                       
Shares used in per share cal­cu­la­ti­on (GAAP)   1,231     1,226     1,224  
Inte­rest expen­se add-back to GAAP net income   $     $     $ 4  
Shares used in per share cal­cu­la­ti­on (Non-GAAP)   1,233     1,232     1,224  
Inte­rest expen­se add-back to Non-GAAP net income   $     $     $ 2  

 

(1 )   For the three mon­ths ended Decem­ber 26, 2020 and March 28, 2020, GAAP dilu­t­ed EPS cal­cu­la­ti­ons inclu­de 3 mil­li­on and 31 mil­li­on shares, respec­tively, rela­ted to the assu­med con­ver­si­on of the Company’s 2026 Con­ver­ti­ble Notes and the asso­cia­ted $0 mil­li­on and $4 mil­li­on inte­rest expen­se, respec­tively, add-back to net inco­me under the “if con­ver­ted” method.

For the three mon­ths ended March 27, 2021, Decem­ber 26, 2020 and March 28, 2020, Non-GAAP dilu­t­ed EPS cal­cu­la­ti­ons inclu­de 2 mil­li­on, 9 mil­li­on and 31 mil­li­on shares, respec­tively, rela­ted to the assu­med con­ver­si­on of the Company’s 2026 Con­ver­ti­ble Notes and the asso­cia­ted $0 mil­li­on, $0 mil­li­on and $2 mil­li­on inte­rest expen­se, respec­tively, add-back to net inco­me under the “if con­ver­ted” method.

About AMD
For more than 50 years, AMD has dri­ven inno­va­ti­on in high-per­for­mance com­pu­ting, gra­phics and visua­liz­a­ti­on tech­no­lo­gies – the buil­ding blocks for gaming, immer­si­ve plat­forms and the data cen­ter. Hund­reds of mil­li­ons of con­su­mers, lea­ding For­tu­ne 500 busi­nes­ses and cut­ting-edge sci­en­ti­fic rese­arch faci­li­ties around the world rely on AMD tech­no­lo­gy dai­ly to impro­ve how they live, work and play. AMD employees around the world are focu­sed on buil­ding gre­at pro­ducts that push the bounda­ries of what is pos­si­ble. For more infor­ma­ti­on about how AMD is enab­ling today and inspi­ring tomor­row, visit the AMD (NASDAQ: AMDweb­siteblogFace­book and Twit­ter pages.

Cau­tio­na­ry Statement

This press release con­tains for­ward-loo­king state­ments con­cer­ning Advan­ced Micro Devices, Inc. (AMD) such as AMD’s expec­ta­ti­on for strong growth across its busi­ness; AMD’s growth oppor­tu­nities and cus­to­mer rela­ti­ons­hips; the fea­tures, func­tio­n­a­li­ty, per­for­mance, avai­la­bi­li­ty, timing and expec­ted bene­fits of AMD pro­ducts; and AMD’s expec­ted second quar­ter 2021 and fis­cal 2021 finan­cial out­look, inclu­ding reve­nue and non-GAAP gross mar­gin and expec­ted dri­vers based on cur­rent expec­ta­ti­ons, which are made pur­suant to the Safe Har­bor pro­vi­si­ons of the Pri­va­te Secu­ri­ties Liti­ga­ti­on Reform Act of 1995. For­ward-loo­king state­ments are com­mon­ly iden­ti­fied by words such as “would,” “may,” “expects,” “belie­ves,” “plans,” “intends,” “pro­jects” and other terms with simi­lar mea­ning. Inves­tors are cau­tio­ned that the for­ward-loo­king state­ments in this pre­sen­ta­ti­on are based on cur­rent beliefs, assump­ti­ons and expec­ta­ti­ons, speak only as of the date of this release and invol­ve risks and uncer­tain­ties that could cau­se actu­al results to dif­fer mate­ri­al­ly from cur­rent expec­ta­ti­ons. Such state­ments are sub­ject to cer­tain known and unknown risks and uncer­tain­ties, many of which are dif­fi­cult to pre­dict and gene­ral­ly bey­ond AMD’s con­trol, that could cau­se actu­al results and other future events to dif­fer mate­ri­al­ly from tho­se expres­sed in, or implied or pro­jec­ted by, the for­ward-loo­king infor­ma­ti­on and state­ments. Mate­ri­al fac­tors that could cau­se actu­al results to dif­fer mate­ri­al­ly from cur­rent expec­ta­ti­ons inclu­de, without limi­ta­ti­on, the fol­lowing: Intel Corporation’s domi­nan­ce of the micro­pro­ces­sor mar­ket and its aggres­si­ve busi­ness prac­ti­ces; glo­bal eco­no­mic uncer­tain­ty; the loss of a signi­fi­cant cus­to­mer; the impact of the COVID-19 pan­de­mic on AMD’s busi­ness, finan­cial con­di­ti­on and results of ope­ra­ti­ons; the com­pe­ti­ti­ve mar­kets in which AMD’s pro­ducts are sold; quar­ter­ly and sea­so­nal sales pat­terns; mar­ket con­di­ti­ons of the indus­tries in which AMD pro­ducts are sold; the cycli­cal natu­re of the semi­con­duc­tor indus­try; AMD’s abi­li­ty to ade­qua­te­ly pro­tect its tech­no­lo­gy or other intel­lec­tu­al pro­per­ty; unfa­vor­able cur­ren­cy exchan­ge rate fluc­tua­tions; the abi­li­ty of third par­ty manu­fac­tu­rers to manu­fac­tu­re AMD’s pro­ducts on a time­ly basis in suf­fi­ci­ent quan­ti­ties and using com­pe­ti­ti­ve tech­no­lo­gies; expec­ted manu­fac­tu­ring yiel­ds for AMD’s pro­ducts; the avai­la­bi­li­ty of essen­ti­al equip­ment, mate­ri­als, sub­stra­tes, or manu­fac­tu­ring pro­ces­ses; AMD’s abi­li­ty to intro­du­ce pro­ducts on a time­ly basis with fea­tures and per­for­mance levels that pro­vi­de value to its cus­to­mers; AMD’s abi­li­ty to gene­ra­te reve­nue from its semi-cus­tom SoC pro­ducts; poten­ti­al secu­ri­ty vul­nera­bi­li­ties; poten­ti­al IT outa­ges, data loss, data breaches and cyber-attacks; uncer­tain­ties invol­ving the orde­ring and ship­ment of AMD’s pro­ducts; AMD’s reli­an­ce on third-par­ty intel­lec­tu­al pro­per­ty to design and intro­du­ce new pro­ducts in a time­ly man­ner; AMD’s reli­an­ce on third-par­ty com­pa­nies for the design, manu­fac­tu­re and sup­ply of mother­boards, soft­ware and other com­pu­ter plat­form com­pon­ents; AMD’s reli­an­ce on Micro­soft Cor­po­ra­ti­on and other soft­ware ven­dors’ sup­port to design and deve­lop soft­ware to run on AMD’s pro­ducts; AMD’s reli­an­ce on third-par­ty dis­tri­bu­tors and add-in-board part­ners; the impact of modi­fi­ca­ti­on or inter­rup­ti­on of AMD’s inter­nal busi­ness pro­ces­ses and infor­ma­ti­on sys­tems; com­pa­ti­bi­li­ty of AMD’s pro­ducts with some or all indus­try-stan­dard soft­ware and hard­ware; cos­ts rela­ted to defec­ti­ve pro­ducts; the effi­ci­en­cy of AMD’s sup­ply chain; AMD’s abi­li­ty to rely on third par­ty sup­ply-chain logistics func­tions; AMD’s abi­li­ty to effec­tively con­trol the sales of its pro­ducts on the gray mar­ket; the impact of government actions and regu­la­ti­ons such as export admi­nis­tra­ti­on regu­la­ti­ons, tariffs and tra­de pro­tec­tion mea­su­res; AMD’s abi­li­ty to rea­li­ze its defer­red tax assets; poten­ti­al tax lia­bi­li­ties; cur­rent and future claims and liti­ga­ti­on; the impact of envi­ron­men­tal laws, con­flict mine­rals-rela­ted pro­vi­si­ons and other laws or regu­la­ti­ons; the impact of acqui­si­ti­ons, joint ven­tures and/or invest­ments on AMD’s busi­ness, inclu­ding the announ­ced acqui­si­ti­on of Xilinx, and the fail­u­re to inte­gra­te acqui­red busi­nes­ses; AMD’s abi­li­ty to com­ple­te the Xilinx mer­ger; the impact of the announ­ce­ment and pen­den­cy of the Xilinx mer­ger on AMD’s busi­ness; the impact of any impairment of the com­bi­ned company’s assets on the com­bi­ned company’s finan­cial posi­ti­on and results of ope­ra­ti­on; the restric­tions impo­sed by agree­ments gover­ning AMD’s notes and the revol­ving credit faci­li­ty; the poten­ti­al dilu­ti­ve effect if the 2.125% Con­ver­ti­ble Seni­or Notes due 2026 are con­ver­ted; AMD’s indeb­ted­ness; AMD’s abi­li­ty to gene­ra­te suf­fi­ci­ent cash to ser­vice its debt obli­ga­ti­ons or meet its working capi­tal requi­re­ments; AMD’s abi­li­ty to repurcha­se its out­stan­ding debt in the event of a chan­ge of con­trol; AMD’s abi­li­ty to gene­ra­te suf­fi­ci­ent reve­nue and ope­ra­ting cash flow or obtain exter­nal finan­cing for rese­arch and deve­lo­p­ment or other stra­te­gic invest­ments; poli­ti­cal, legal, eco­no­mic risks and natu­ral dis­as­ters; future impairments of good­will and tech­no­lo­gy licen­se purcha­ses; AMD’s abi­li­ty to attract and retain qua­li­fied per­son­nel; AMD’s stock pri­ce vola­ti­li­ty; and world­wi­de poli­ti­cal con­di­ti­ons. Inves­tors are urged to review in detail the risks and uncer­tain­ties in AMD’s Secu­ri­ties and Exchan­ge Com­mis­si­on filings, inclu­ding but not limi­ted to AMD’s most recent reports on Forms 10‑K and 10‑Q.

(*)    In this ear­nings press release, in addi­ti­on to GAAP finan­cial results, AMD has pro­vi­ded non-GAAP finan­cial mea­su­res inclu­ding non-GAAP gross pro­fit, non-GAAP ope­ra­ting expen­ses, non-GAAP ope­ra­ting inco­me, non-GAAP net inco­me and non-GAAP ear­nings per share. AMD uses a nor­ma­li­zed tax rate in its com­pu­ta­ti­on of the non-GAAP inco­me tax pro­vi­si­on to pro­vi­de bet­ter con­sis­ten­cy across the repor­ting peri­ods. For fis­cal 2021, AMD uses a pro­jec­ted non-GAAP tax rate of 15%, which exclu­des the tax impact of pre-tax non-GAAP adjus­t­ments, reflec­ting cur­r­ent­ly avail­ab­le infor­ma­ti­on. AMD also pro­vi­ded adjus­ted EBITDA and free cash flow as sup­ple­men­tal non-GAAP mea­su­res of its per­for­mance. The­se items are defi­ned in the foot­no­tes to the selec­ted cor­po­ra­te data tables pro­vi­ded at the end of this ear­nings press release. AMD is pro­vi­ding the­se finan­cial mea­su­res becau­se it belie­ves this non-GAAP pre­sen­ta­ti­on makes it easier for inves­tors to com­pa­re its ope­ra­ting results for cur­rent and his­to­ri­cal peri­ods and also becau­se AMD belie­ves it assists inves­tors in com­pa­ring AMD’s per­for­mance across repor­ting peri­ods on a con­sis­tent basis by exclu­ding items that it does not belie­ve are indi­ca­ti­ve of its core ope­ra­ting per­for­mance and for the other rea­sons descri­bed in the foot­no­tes to the selec­ted data tables. The non-GAAP finan­cial mea­su­res dis­c­lo­sed in this ear­nings press release should be view­ed in addi­ti­on to and not as a sub­sti­tu­te for or supe­ri­or to AMD’s repor­ted results pre­pa­red in accordance with GAAP and should be read only in con­junc­tion with AMD’s Con­so­li­da­ted Finan­cial State­ments pre­pa­red in accordance with GAAP. The­se non-GAAP finan­cial mea­su­res refe­ren­ced are recon­ci­led to their most direct­ly com­pa­ra­ble GAAP finan­cial mea­su­res in the data tables at the end of this ear­nings press release. This ear­nings press release also con­tains for­ward-loo­king non-GAAP gross mar­gin con­cer­ning AMD’s finan­cial out­look, which is based on cur­rent expec­ta­ti­ons as of April 27, 2021 and assump­ti­ons and beliefs that invol­ve nume­rous risks and uncer­tain­ties. AMD under­ta­kes no intent or obli­ga­ti­on to publicly update or revi­se its out­look state­ments as a result of new infor­ma­ti­on, future events or other­wi­se, except as may be requi­red by law.

AMD, the AMD Arrow logo, EPYC, Rade­on, Ryzen, Instinct, Thre­ad­rip­per and com­bi­na­ti­ons the­re­of, are trade­marks of Advan­ced Micro Devices, Inc. Other names are for infor­ma­tio­nal pur­po­ses only and used to iden­ti­fy com­pa­nies and pro­ducts and may be trade­marks of their respec­ti­ve owner.

 

 
ADVANCED MICRO DEVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Mil­li­ons except per share amounts and per­cen­ta­ges) (Unau­di­ted)
   
  Three Mon­ths Ended
  March 27,
2021
  Decem­ber 26,
2020
  March 28,
2020
Net reve­nue $ 3,445       $ 3,244       $ 1,786    
Cost of sales 1,858       1,793       968    
Gross pro­fit 1,587       1,451       818    
Gross mar­gin % 46   %   45   %   46   %
Rese­arch and development 610       573       442    
Mar­ke­ting, gene­ral and administrative 319       308       199    
Licen­sing gain (4 )              
Ope­ra­ting income 662       570       177    
Inte­rest expense (9 )     (9 )     (13 )  
Other inco­me (expen­se), net (11 )     (15 )     4    
Inco­me befo­re inco­me taxes and equi­ty income 642       546       168    
Inco­me tax pro­vi­si­on (bene­fit) 89       (1,232 )     6    
Equi­ty inco­me in investee 2       3          
Net Inco­me $ 555       $ 1,781       $ 162    
Ear­nings per share          
Basic $ 0.46       $ 1.48       $ 0.14    
Dilu­t­ed $ 0.45       $ 1.45       $ 0.14    
Shares used in per share calculation          
Basic 1,213       1,205       1,170    
Dilu­t­ed 1,231       1,226       1,224    
                       

 

 
ADVANCED MICRO DEVICES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Mil­li­ons)
         
    March 27,
2021
  Decem­ber 26,
2020
    (Unau­di­ted)    
ASSETS        
Cur­rent assets:        
Cash and cash equivalents   $ 1,763       $ 1,595    
Short-term invest­ments   1,353       695    
Accounts receiva­ble, net   2,178       2,066    
Invent­ories   1,653       1,399    
Receiva­bles from rela­ted parties   7       10    
Pre­paid expen­ses and other cur­rent assets   243       378    
Total cur­rent assets   7,197       6,143    
Pro­per­ty and equip­ment, net   681       641    
Ope­ra­ting lea­se right-of use assets   241       208    
Good­will   289       289    
Invest­ment: equi­ty method   65       63    
Defer­red tax assets   1,162       1,245    
Other non-cur­rent assets   412       373    
Total Assets   $ 10,047       $ 8,962    
         
LIABILITIES AND STOCKHOLDERSEQUITY        
Cur­rent liabilities:        
Accounts paya­ble   $ 949       $ 468    
Paya­bles to rela­ted parties   40       78    
Accrued lia­bi­li­ties   1,779       1,796    
Other cur­rent liabilities   96       75    
Total cur­rent liabilities   2,864       2,417    
Long-term debt, net   313       330    
Long-term ope­ra­ting lea­se liabilities   238       201    
Other long-term liabilities   155       177    
         
Stock­hol­ders’ equity:        
Capi­tal stock:        
Com­mon stock, par value   12       12    
Addi­tio­nal paid-in capital   10,658       10,544    
Tre­a­su­ry stock, at cost   (141 )     (131 )  
Accu­mu­la­ted defi­cit (1)   (4,058 )     (4,605 )  
Accu­mu­la­ted other com­pre­hen­si­ve income   6       17    
Total stock­hol­ders’ equity   $ 6,477       $ 5,837    
Total Lia­bi­li­ties and Stock­hol­ders’ Equity   $ 10,047       $ 8,962    

 

(1)   During the first quar­ter of 2021, the Com­pa­ny adop­ted ASU 2019-12, Inco­me Taxes (Topic 740): Sim­pli­fy­ing the Accoun­ting for Inco­me Taxes, using the modi­fied retro­spec­ti­ve adop­ti­on method, which resul­ted in $8 mil­li­on of defer­red tax lia­bi­li­ty asso­cia­ted with book-tax dif­fe­ren­ces in a for­eign equi­ty method invest­ment reco­gni­zed in Accu­mu­la­ted deficit.

 

 
ADVANCED MICRO DEVICES, INC.
SELECTED CASH FLOW INFORMATION
(Mil­li­ons) (Unau­di­ted)
     
    Three Mon­ths Ended
    March 27,
2021
  Decem­ber 26,
2020
  March 28,
2020
Net cash pro­vi­ded by (used in)            
Ope­ra­ting activities   $ 898       $ 554       $ (65 )  
Inves­ting activities   $ (722 )     $ (294 )     $ (73 )  
Finan­cing activities   $ (8 )     $ 35       $ 2    
                               

 

 
SELECTED CORPORATE DATA
(Mil­li­ons) (Unau­di­ted)
     
    Three Mon­ths Ended
    March 27,
2021
  Decem­ber 26,
2020
  March 28,
2020
Seg­ment Information            
Com­pu­ting and Gra­phics (1)            
Net reve­nue   $ 2,100       $ 1,960       $ 1,438    
Ope­ra­ting income   $ 485       $ 420       $ 262    
Enter­pri­se, Embed­ded and Semi-Cus­tom (2)            
Net reve­nue   $ 1,345       $ 1,284       $ 348    
Ope­ra­ting inco­me (loss)   $ 277       $ 243       $ (26 )  
All Other (3)            
Net reve­nue   $       $       $    
Ope­ra­ting loss   $ (100 )     $ (93 )     $ (59 )  
Total            
Net reve­nue   $ 3,445       $ 3,244       $ 1,786    
Ope­ra­ting income   $ 662       $ 570       $ 177    
             
             
Other Data            
Capi­tal expenditures   $ 66       $ 74       $ 55    
Adjus­ted EBITDA (4)   $ 857       $ 753       $ 304    
Cash, cash equi­va­lents and short-term investments   $ 3,116       $ 2,290       $ 1,385    
Free cash flow (5)   $ 832       $ 480       $ (120 )  
Total assets   $ 10,047       $ 8,962       $ 5,864    
Total debt   $ 313       $ 330       $ 488    

 

(1)   The Com­pu­ting and Gra­phics seg­ment pri­ma­ri­ly inclu­des desk­top and note­book micro­pro­ces­sors, acce­le­ra­ted pro­ces­sing units that inte­gra­te micro­pro­ces­sors and gra­phics, chip­sets, dis­cre­te gra­phics pro­ces­sing units (GPUs), data cen­ter and pro­fes­sio­nal GPUs and deve­lo­p­ment ser­vices. From time to time, the Com­pa­ny may also sell or licen­se por­ti­ons of its IP portfolio.
     
(2)   The Enter­pri­se, Embed­ded and Semi-Cus­tom seg­ment pri­ma­ri­ly inclu­des ser­ver and embed­ded pro­ces­sors, semi-cus­tom Sys­tem-on-Chip (SoC) pro­ducts, deve­lo­p­ment ser­vices and tech­no­lo­gy for game con­so­les. From time to time, the Com­pa­ny may also sell or licen­se por­ti­ons of its IP portfolio.
     
(3)   All Other cate­go­ry pri­ma­ri­ly inclu­des cer­tain expen­ses and credits that are not allo­ca­ted to any of the ope­ra­ting seg­ments. Also inclu­ded in this cate­go­ry is stock-based com­pen­sa­ti­on expen­se and acqui­si­ti­on-rela­ted costs.
     
(4)   Recon­ci­lia­ti­on of GAAP Net Inco­me to Adjus­ted EBITDA*
        Three Mon­ths Ended
    March 27,
2021
  Decem­ber 26,
2020
  March 28,
2020
    GAAP net income   $ 555       $ 1,781       $ 162    
    Inte­rest expense   9       9       13    
    Other (inco­me) expen­se, net   11       15       (4 )  
    Inco­me tax pro­vi­si­on (bene­fit)   89       (1,232 )     6    
    Equi­ty inco­me in investee   (2 )     (3 )        
    Stock-based com­pen­sa­ti­on   85       79       59    
    Depre­cia­ti­on and amortization   95       90       68    
    Acqui­si­ti­on-rela­ted costs   15       14          
    Adjus­ted EBITDA   $ 857       $ 753       $ 304    

 

(5)   Recon­ci­lia­ti­on of GAAP Net Cash Pro­vi­ded by Ope­ra­ting Acti­vi­ties to Free Cash Flow**
         
        Three Mon­ths Ended
        March 27,
2021
  Decem­ber 26,
2020
  March 28,
2020
    GAAP net cash pro­vi­ded by ope­ra­ting activities   $ 898       $ 554       $ (65 )  
    Purcha­ses of pro­per­ty and equipment   (66 )     (74 )     (55 )  
    Free cash flow   $ 832       $ 480       $ (120 )  

 

*   The Com­pa­ny pres­ents “Adjus­ted EBITDA” as a sup­ple­men­tal mea­su­re of its per­for­mance. Adjus­ted EBITDA for the Com­pa­ny is deter­mi­ned by adjus­ting GAAP net inco­me for inte­rest expen­se, other inco­me (expen­se), net, inco­me tax pro­vi­si­on (bene­fit), equi­ty inco­me on inves­tee, stock-based com­pen­sa­ti­on, and depre­cia­ti­on and amor­tiz­a­ti­on expen­se. The Com­pa­ny also inclu­ded acqui­si­ti­on-rela­ted cos­ts for the quar­ter ended March 27, 2021 and Decem­ber 26, 2020. The Com­pa­ny cal­cu­la­tes and pres­ents Adjus­ted EBITDA becau­se manage­ment belie­ves it is of impor­t­ance to inves­tors and len­ders in rela­ti­on to its over­all capi­tal struc­tu­re and its abi­li­ty to bor­row addi­tio­nal funds. In addi­ti­on, the Com­pa­ny pres­ents Adjus­ted EBITDA becau­se it belie­ves this mea­su­re assists inves­tors in com­pa­ring its per­for­mance across repor­ting peri­ods on a con­sis­tent basis by exclu­ding items that the Com­pa­ny does not belie­ve are indi­ca­ti­ve of its core ope­ra­ting per­for­mance. The Company’s cal­cu­la­ti­on of Adjus­ted EBITDA may or may not be con­sis­tent with the cal­cu­la­ti­on of this mea­su­re by other com­pa­nies in the same indus­try. Inves­tors should not view Adjus­ted EBITDA as an alter­na­ti­ve to the GAAP ope­ra­ting mea­su­re of inco­me or GAAP liqui­di­ty mea­su­res of cash flows from ope­ra­ting, inves­ting and finan­cing acti­vi­ties. In addi­ti­on, Adjus­ted EBITDA does not take into account chan­ges in cer­tain assets and lia­bi­li­ties that can affect cash flows.
     
**   The Com­pa­ny also pres­ents free cash flow as a sup­ple­men­tal Non-GAAP mea­su­re of its per­for­mance. Free cash flow is deter­mi­ned by adjus­ting GAAP net cash pro­vi­ded by ope­ra­ting acti­vi­ties for capi­tal expen­dit­ures. The Com­pa­ny cal­cu­la­tes and com­mu­ni­ca­tes free cash flow in the finan­cial ear­nings press release becau­se manage­ment belie­ves it is of impor­t­ance to inves­tors to under­stand the natu­re of the­se cash flows. The Company’s cal­cu­la­ti­on of free cash flow may or may not be con­sis­tent with the cal­cu­la­ti­on of this mea­su­re by other com­pa­nies in the same indus­try. Inves­tors should not view free cash flow as an alter­na­ti­ve to GAAP liqui­di­ty mea­su­res of cash flows from ope­ra­ting activities.

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