AMD Reports Second Quarter 2021 Financial Results

— Reve­nue incre­a­sed 99 per­cent year-over-year; Gross Mar­gin expan­ded to 48 percent —

SANTA CLARA, Calif., July 27, 2021 (GLOBE NEWSWIRE) — AMD (NASDAQ:AMD) today announ­ced reve­nue for the second quar­ter of 2021 of $3.85 bil­li­on, ope­ra­ting inco­me of $831 mil­li­on, net inco­me of $710 mil­li­on and dilu­t­ed ear­nings per share of $0.58. On a non-GAAP* basis, ope­ra­ting inco­me was $924 mil­li­on, net inco­me was $778 mil­li­on and dilu­t­ed ear­nings per share was $0.63.

GAAP Quar­ter­ly Finan­cial Results

  Q2 2021 Q2 2020 Y/Y Q1 2021 Q/Q
Reve­nue ($M) $3,850 $1,932 Up 99% $3,445 Up 12%
Gross pro­fit ($M) $1,830 $848 Up 116% $1,587 Up 15%
Gross mar­gin % 48% 44% Up 4pp 46% Up 2pp
Ope­ra­ting expen­ses ($M) $1,000 $675 Up 48% $929 Up 8%
Ope­ra­ting inco­me ($M) $831 $173 Up 380% $662 Up 26%
Ope­ra­ting margin % 22% 9% Up 13pp 19% Up 3pp
Net inco­me ($M) $710 $157 Up 352% $555 Up 28%
Ear­nings per share $0.58 $0.13 Up 346% $0.45 Up 29%

Non-GAAP* Quar­ter­ly Finan­cial Results

  Q2 2021 Q2 2020 Y/Y Q1 2021 Q/Q
Reve­nue ($M) $3,850 $1,932 Up 99% $3,445 Up 12%
Gross pro­fit ($M) $1,832 $850 Up 116% $1,588 Up 15%
Gross mar­gin % 48% 44% Up 4pp 46% Up 2pp
Ope­ra­ting expen­ses ($M) $909 $617 Up 47% $830 Up 10%
Ope­ra­ting inco­me ($M) $924 $233 Up 297% $762 Up 21%
Ope­ra­ting margin % 24% 12% Up 12pp 22% Up 2pp
Net inco­me ($M) $778 $216 Up 260% $642 Up 21%
Ear­nings per share $0.63 $0.18 Up 250% $0.52 Up 21%

Our busi­ness per­for­med excep­tio­nal­ly well in the second quar­ter as reve­nue and ope­ra­ting mar­gin dou­bled and pro­fi­ta­bi­li­ty more than tripled year-over-year,” said AMD pre­si­dent and CEO Lisa Su. “We are gro­wing signi­fi­cant­ly fas­ter than the mar­ket with strong demand across all of our busi­nes­ses. We now expect our 2021 annu­al reve­nue to grow by appro­xi­mate­ly 60 per­cent year-over-year dri­ven by strong exe­cu­ti­on and incre­a­sed cus­to­mer pre­fe­rence for our lea­ders­hip products.”

Q2 2021 Results

  • Reve­nue was $3.85 bil­li­on, up 99 per­cent year-over-year and 12 per­cent quar­ter-over-quar­ter dri­ven by hig­her reve­nue in both the Com­pu­ting and Gra­phics seg­ment and Enter­pri­se and Embed­ded and Semi-cus­tom segment.
  • Gross mar­gin was 48 per­cent, up 4 per­cen­ta­ge points year-over-year and 2 per­cen­ta­ge points quar­ter-over-quar­ter. The incre­a­ses were dri­ven by a richer mix of sales, inclu­ding high-end Ryzen™, Rade­on™ and EPYC™ pro­ces­sor sales.
  • Ope­ra­ting inco­me was $831 mil­li­on com­pa­red to ope­ra­ting inco­me of $173 mil­li­on a year ago and $662 mil­li­on in the pri­or quar­ter. Non-GAAP ope­ra­ting inco­me was $924 mil­li­on com­pa­red to $233 mil­li­on a year ago and $762 mil­li­on in the pri­or quar­ter. Ope­ra­ting inco­me impro­ve­ments were pri­ma­ri­ly dri­ven by hig­her revenue.
  • Net inco­me was $710 mil­li­on com­pa­red to $157 mil­li­on a year ago and $555 mil­li­on in the pri­or quar­ter. Non-GAAP net inco­me was $778 mil­li­on com­pa­red to $216 mil­li­on a year ago and $642 mil­li­on in the pri­or quarter.
  • Dilu­t­ed ear­nings per share was $0.58 com­pa­red to $0.13 a year ago and $0.45 in the pri­or quar­ter. Non-GAAP dilu­t­ed ear­nings per share was $0.63 com­pa­red to $0.18 a year ago and $0.52 in the pri­or quarter.
  • Cash, cash equi­va­lents and short-term invest­ments were $3.79 bil­li­on at the end of the quarter.
  • Cash from ope­ra­ti­ons was $952 mil­li­on com­pa­red to $243 mil­li­on a year ago and $898 mil­li­on in the pri­or quar­ter. Free cash flow was a record $888 mil­li­on com­pa­red to free cash flow of $152 mil­li­on a year ago and $832 mil­li­on in the pri­or quarter.
  • In May 2021, the Com­pa­ny announ­ced a $4 bil­li­on share repurcha­se pro­gram. In the second quar­ter, the Com­pa­ny repurcha­sed 3.2 mil­li­on shares of com­mon stock for $256 million.

Quar­ter­ly Finan­cial Seg­ment Summary

  • Com­pu­ting and Gra­phics seg­ment reve­nue was $2.25 bil­li­on, up 65 per­cent year-over-year and 7 per­cent quar­ter-over-quar­ter dri­ven by hig­her cli­ent and gra­phics pro­ces­sor sales. 
    • 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 grew year-over-year and quar­ter-over-quar­ter dri­ven by high-end gra­phics pro­duct sales, inclu­ding data cen­ter GPU sales. 
    • Ope­ra­ting inco­me was $526 mil­li­on com­pa­red to $200 mil­li­on a year ago and $485 mil­li­on in the pri­or quar­ter. The incre­a­ses were pri­ma­ri­ly dri­ven by hig­her revenue.
  • Enter­pri­se, Embed­ded and Semi-Cus­tom seg­ment reve­nue was $1.60 bil­li­on, up 183 per­cent year-over-year and 19 per­cent quar­ter-over-quar­ter. The incre­a­ses were dri­ven by hig­her EPYC pro­ces­sor reve­nue and semi-cus­tom pro­duct sales. 
    • Ope­ra­ting inco­me was $398 mil­li­on com­pa­red to $33 mil­li­on a year ago and $277 mil­li­on in the pri­or quar­ter. The incre­a­ses were pri­ma­ri­ly dri­ven by hig­her revenue.
  • All Other ope­ra­ting loss was $93 mil­li­on com­pa­red to $60 mil­li­on a year ago and $100 mil­li­on in the pri­or quarter.

Recent PR Highlights

  • AMD announ­ced that stock­hol­ders over­whel­min­gly appro­ved its acqui­si­ti­on of Xilinx. The pro­po­sed acqui­si­ti­on remains on-track to clo­se by the end of the year.
  • AMD announ­ced a $4 bil­li­on share repurcha­se pro­gram. AMD expects to fund repurcha­ses through cash gene­ra­ted from operations.
  • The Top500 orga­niz­a­ti­on announ­ced the world’s fas­test super­com­pu­ters. The num­ber of AMD-powe­red sys­tems on the list grew by almost five times in the past year. AMD EPYC pro­ces­sors power half of the 58 new sys­tems added to the June 2021 listing.
  • AMD and its tech­no­lo­gy part­ners announ­ced nume­rous new high-per­for­mance com­pu­ting sys­tems taking advan­ta­ge of AMD EPYC pro­ces­sors. The­se sys­tems inclu­de Micro­soft Azu­re super­com­pu­ters for UK Met OfficeThe Perl­mut­ter super­com­pu­ter and The Sin­g­a­po­re Natio­nal Super­com­pu­ting Cent­re super­com­pu­ter.
  • Goog­le Cloud and AMD announ­ced a new instance (T2D) based on 3rd Gen AMD EPYC pro­ces­sors. Accord­ing to Goog­le Cloud, by using 3rd Gen EPYC pro­ces­sors, T2D pro­vi­des up to 56 per­cent bet­ter abso­lu­te per­for­mance and more than 40 per­cent hig­her pri­ce-per­for­mance for sca­le-out workloads com­pa­red to other cloud instances.
  • AMD con­ti­nued advan­ces in indus­try-lea­ding pack­a­ging inno­va­tions to push the enve­lo­pe in high-per­for­mance com­pu­ting with new 3D chip­let tech­no­lo­gy. This pack­a­ging bre­akthrough com­bi­nes AMD’s inno­va­ti­ve chip­let archi­tec­tu­re with 3D stacking using an indus­try-lea­ding hybrid bond approach.
  • AMD announ­ced the AMD Advan­ta­ge Design Frame­work desi­gned to deli­ver best-in-class gaming expe­ri­en­ces on note­book PCs by com­bi­ning AMD Rade­on RX 6000M Seri­es Mobi­le Gra­phics pro­ces­sors, AMD Rade­on Soft­ware and AMD Ryzen 5000 Seri­es Mobi­le Pro­ces­sors with exclu­si­ve AMD smart tech­no­lo­gies and other advan­ced sys­tem design characteristics.
  • The adop­ti­on of AMD’s high-per­for­mance “Zen” CPUs and AMD RDNA™ 2 GPUs expan­ded into new markets. 
    • AMD announ­ced Tes­la is using AMD Ryzen Embed­ded Pro­ces­sors and AMD RDNA 2 based GPUs to power the info­tain­ment sys­tem in the new Tes­la Model S and Model X vehicles.
    • AMD announ­ced 2nd Gen AMD EPYC pro­ces­sors are powe­ring the new HPE Alle­tra 6000 sto­rage solu­ti­ons, enab­ling up to 3x more per­for­mance com­pa­red to pre­vious HPE Nim­ble sto­rage all flash arrays.
    • Val­ve announ­ced Steam Deck, a hand­held gaming con­so­le powe­red by a semi-cus­tom AMD pro­ces­sor that can play the latest AAA PC games and access the ent­i­re Steam libra­ry on the go.
  • AMD laun­ched Fide­li­ty­FX Super Reso­lu­ti­on (FSR), a sta­te-of-the-art spa­ti­al ups­ca­ling algo­rithm fea­ture desi­gned to boost frame­ra­tes and deli­ver high-qua­li­ty, high-reso­lu­ti­on gaming expe­ri­en­ces. AMD also announ­ced that more than 40 game deve­lo­pers pled­ged sup­port for FSR, with more expec­ted in the future.

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 third quar­ter of 2021, AMD expects reve­nue to be appro­xi­mate­ly $4.1 bil­li­on, plus or minus $100 mil­li­on, an incre­a­se of appro­xi­mate­ly 46 per­cent year-over-year and appro­xi­mate­ly 6 per­cent quar­ter-over-quar­ter. The year-over-year incre­a­se is expec­ted to be dri­ven by growth across all busi­nes­ses. The quar­ter-over-quar­ter incre­a­se is expec­ted to be pri­ma­ri­ly dri­ven by growth in AMD’s data cen­ter and gaming busi­nes­ses. AMD expects non-GAAP gross mar­gin to be appro­xi­mate­ly 48 per­cent in the third quar­ter of 2021.
For the full year 2021, AMD now expects reve­nue growth of appro­xi­mate­ly 60 per­cent, up from pri­or gui­d­ance of appro­xi­mate­ly 50 per­cent, dri­ven by strong growth across all busi­nes­ses. AMD now expects non-GAAP gross mar­gin to be appro­xi­mate­ly 48 per­cent for the full year 2021, up from pri­or gui­d­ance of appro­xi­mate­ly 47 percent.

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 second 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.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In mil­li­ons, except per share data) (Unau­di­ted)    
    Three Mon­ths Ended
    June 26,
2021
  March 27,
2021
  June 27,
2020
GAAP gross profit   $ 1,830     $ 1,587     $ 848  
GAAP gross margin %   48 %   46 %   44 %
Stock-based com­pen­sa­ti­on   2     1     2  
Non-GAAP gross profit   $ 1,832     $ 1,588     $ 850  
Non-GAAP gross margin %   48 %   46 %   44 %
             
GAAP ope­ra­ting expenses   $ 1,000     $ 929     $ 675  
GAAP ope­ra­ting expenses/revenue %   26 %   27 %   35 %
Stock-based com­pen­sa­ti­on   81     84     58  
Acqui­si­ti­on-rela­ted costs   10     15      
Non-GAAP ope­ra­ting expenses   $ 909     $ 830     $ 617  
Non-GAAP ope­ra­ting expenses/revenue%   24 %   24 %   32 %
             
GAAP ope­ra­ting income   $ 831     $ 662     $ 173  
GAAP ope­ra­ting margin %   22 %   19 %   9 %
Stock-based com­pen­sa­ti­on   83     85     60  
Acqui­si­ti­on-rela­ted costs   10     15      
Non-GAAP ope­ra­ting income   $ 924     $ 762     $ 233  
Non-GAAP ope­ra­ting margin %   24 %   22 %   12 %
             
    Three Mon­ths Ended
    June 26,
2021
  March 27,
2021
  June 27,
2020
GAAP net inco­me / ear­nings per share   $ 710     $ 0.58     $ 555     $ 0.45     $ 157     $ 0.13  
Loss on debt redemption/conversion   1         6     0.01          
Non-cash inte­rest expen­se rela­ted to con­ver­ti­ble debt                   2      
Stock-based com­pen­sa­ti­on   83     0.06     85     0.07     60     0.05  
Equi­ty inco­me in investee   (2 )       (2 )       (1 )    
Acqui­si­ti­on-rela­ted costs   10     0.01     15     0.01          
Impairment of investment           8     0.01          
Inco­me tax provision   (24 )   (0.02 )   (25 )   (0.03 )   (2 )    
Non-GAAP net inco­me / ear­nings per share   $ 778     $ 0.63     $ 642     $ 0.52     $ 216     $ 0.18  
                                                 
Shares used and net inco­me adjus­t­ment in
ear­nings per share cal­cu­la­ti­on (1)
                                               
Shares used in per share cal­cu­la­ti­on (GAAP)   1,232     1,231     1,227  
Inte­rest expen­se add-back to GAAP net income   $     $     $ 3  
Shares used in per share cal­cu­la­ti­on (Non-GAAP)   1,232     1,233     1,227  
Inte­rest expen­se add-back to Non-GAAP net income   $     $     $ 1  
(1 )   For the three mon­ths ended June 27, 2020, GAAP dilu­t­ed EPS cal­cu­la­ti­ons inclu­de 31 mil­li­on shares rela­ted to the Company’s 2026 Con­ver­ti­ble Notes and the asso­cia­ted $3 mil­li­on inte­rest expen­se add-back to net inco­me under the “if con­ver­ted” method.

For the three mon­ths ended March 27, 2021 and June 27, 2020, Non-GAAP dilu­t­ed EPS cal­cu­la­ti­ons inclu­de 2 mil­li­on and 31 mil­li­on shares, respec­tively, rela­ted to the Company’s 2026 Con­ver­ti­ble Notes and the asso­cia­ted $0 mil­li­on and $1 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 annu­al reve­nue growth and the expec­ted dri­vers; AMD’s acqui­si­ti­on of Xilinx remai­ning on track to clo­se by the end of the year; the fea­tures, func­tio­n­a­li­ty, per­for­mance, avai­la­bi­li­ty, timing and expec­ted bene­fits of AMD pro­ducts; and AMD’s expec­ted third 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 press release are based on cur­rent beliefs, assump­ti­ons and expec­ta­ti­ons, speak only as of the date of this press 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; the avai­la­bi­li­ty of essen­ti­al equip­ment, mate­ri­als, sub­stra­tes or manu­fac­tu­ring pro­ces­ses; expec­ted manu­fac­tu­ring yiel­ds for AMD’s pro­ducts; 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 secu­ri­ty inci­dents inclu­ding 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; 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 July 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   Six Mon­ths Ended
    June 26,
2021
  March 27,
2021
  June 27,
2020
  June 26,
2021
  June 27,
2020
Net reve­nue   $ 3,850     $ 3,445     $ 1,932     $ 7,295     $ 3,718  
Cost of sales   2,020     1,858     1,084     3,878     2,052  
Gross pro­fit   1,830     1,587     848     3,417     1,666  
Gross mar­gin %   48 %   46   44 %   47 %   45
Rese­arch and development   659     610     460     1,269     902  
Mar­ke­ting, gene­ral and administrative   341     319     215     660     414  
Licen­sing gain   (1 )   (4 )       (5 )    
Ope­ra­ting income   831     662     173     1,493     350  
Inte­rest expense   (10 )   (9 )   (14 )   (19 )   (27 )
Other inco­me (expen­se), net       (11 )   1     (11 )   5  
Inco­me befo­re inco­me taxes and equi­ty income   821     642     160     1,463     328  
Inco­me tax provision   113     89     4     202     10  
Equi­ty inco­me in investee   2     2     1     4     1  
Net Inco­me   $ 710     $ 555     $ 157     $ 1,265     $ 319  
Ear­nings per share                    
Basic   $ 0.58     $ 0.46     $ 0.13     $ 1.04     $ 0.27  
Dilu­t­ed   $ 0.58     $ 0.45     $ 0.13     $ 1.03     $ 0.27  
Shares used in per share calculation                    
Basic   1,216     1,213     1,174     1,214     1,172  
Dilu­t­ed   1,232     1,231     1,227     1,231     1,225  
                               

 

ADVANCED MICRO DEVICES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Mil­li­ons)
         
    June 26,
2021
  Decem­ber 26,
2020
    (Unau­di­ted)    
ASSETS        
Cur­rent assets:        
Cash and cash equivalents   $ 2,623     $ 1,595  
Short-term invest­ments   1,170     695  
Accounts receiva­ble, net   2,020     2,066  
Invent­ories   1,765     1,399  
Receiva­bles from rela­ted parties   6     10  
Pre­paid expen­ses and other cur­rent assets   234     378  
Total cur­rent assets   7,818     6,143  
Pro­per­ty and equip­ment, net   671     641  
Ope­ra­ting lea­se right-of use assets   247     208  
Good­will   289     289  
Invest­ment: equi­ty method   67     63  
Defer­red tax assets   1,090     1,245  
Other non-cur­rent assets   509     373  
Total Assets   $ 10,691     $ 8,962  
         
LIABILITIES AND STOCKHOLDERSEQUITY        
Cur­rent liabilities:        
Accounts paya­ble   $ 836     $ 468  
Paya­bles to rela­ted parties   36     78  
Accrued lia­bi­li­ties   1,911     1,796  
Other cur­rent liabilities   109     75  
Total cur­rent liabilities   2,892     2,417  
Long-term debt, net   313     330  
Long-term ope­ra­ting lea­se liabilities   240     201  
Other long-term liabilities   181     177  
         
Stock­hol­ders’ equity:        
Capi­tal stock:        
Com­mon stock, par value   12     12  
Addi­tio­nal paid-in capital   10,795     10,544  
Tre­a­su­ry stock, at cost   (401 )   (131 )
Accu­mu­la­ted defi­cit (1)   (3,348 )   (4,605 )
Accu­mu­la­ted other com­pre­hen­si­ve income   7     17  
Total stock­hol­ders’ equity   $ 7,065     $ 5,837  
Total Lia­bi­li­ties and Stock­hol­ders’ Equity   $ 10,691     $ 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   Six Mon­ths Ended
    June 26,
2021
  March 27,
2021
  June 27,
2020
  June 26,
2021
  June 27,
2020
Net cash pro­vi­ded by (used in)                    
Ope­ra­ting activities   $ 952     $ 898     $ 243     $ 1,850     $ 178  
Inves­ting activities   $ 119     $ (722 )   $ (36 )   $ (603 )   $ (109 )
Finan­cing activities   $ (211 )   $ (8 )   $ 238     $ (219 )   $ 240  
                                         
SELECTED CORPORATE DATA
(Mil­li­ons) (Unau­di­ted)
    Three Mon­ths Ended   Six Mon­ths Ended
    June 26,
2021
  March 27,
2021
  June 27,
2020
  June 26,
2021
  June 27,
2020
Seg­ment Information                    
Com­pu­ting and Gra­phics (1)                    
Net reve­nue   $ 2,250     $ 2,100     $ 1,367     $ 4,350     $ 2,805  
Ope­ra­ting income   $ 526     $ 485     $ 200     $ 1,011     $ 462  
Enter­pri­se, Embed­ded and Semi-Cus­tom (2)                    
Net reve­nue   $ 1,600     $ 1,345     $ 565     $ 2,945     $ 913  
Ope­ra­ting income   $ 398     $ 277     $ 33     $ 675     $ 7  
All Other (3)                    
Net reve­nue   $     $     $     $     $  
Ope­ra­ting loss   $ (93 )   $ (100 )   $ (60 )   $ (193 )   $ (119 )
Total                    
Net reve­nue   $ 3,850     $ 3,445     $ 1,932     $ 7,295     $ 3,718  
Ope­ra­ting income   $ 831     $ 662     $ 173     $ 1,493     $ 350  
                     
                     
Other Data                    
Capi­tal expenditures   $ 64     $ 66     $ 91     $ 130     $ 146  
Adjus­ted EBITDA (4)   $ 1,021     $ 857     $ 305     $ 1,878     $ 609  
Cash, cash equi­va­lents and short-term investments   $ 3,793     $ 3,116     $ 1,775     $ 3,793     $ 1,775  
Free cash flow (5)   $ 888     $ 832     $ 152     $ 1,720     $ 32  
Total assets   $ 10,691     $ 10,047     $ 6,583     $ 10,691     $ 6,583  
Total debt   $ 313     $ 313     $ 690     $ 313     $ 690  
(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   Six Mon­ths Ended
    June 26,
2021
  March 27,
2021
  June 27,
2020
  June 26,
2021
  June 27,
2020
GAAP net income   $ 710     $ 555     $ 157     $ 1,265     $ 319  
Inte­rest expense   10     9     14     19     27  
Other (inco­me) expen­se, net       11     (1 )   11     (5 )
Inco­me tax provision   113     89     4     202     10  
Equi­ty inco­me in investee   (2 )   (2 )   (1 )   (4 )   (1 )
Stock-based com­pen­sa­ti­on   83     85     60     168     119  
Depre­cia­ti­on and amortization   97     95     72     192     140  
Acqui­si­ti­on-rela­ted costs   10     15         25      
Adjus­ted EBITDA   $ 1,021     $ 857     $ 305     $ 1,878     $ 609  
                                         
(5)        Recon­ci­lia­ti­on of GAAP Net Cash Pro­vi­ded by Ope­ra­ting Acti­vi­ties to Free Cash Flow**
         
    Three Mon­ths Ended   Six Mon­ths Ended
    June 26,
2021
  March 27,
2021
  June 27,
2020
  June 26,
2021
  June 27,
2020
GAAP net cash pro­vi­ded by ope­ra­ting activities   $ 952     $ 898     $ 243     1,850     178  
Purcha­ses of pro­per­ty and equipment   (64 )   (66 )   (91 )   (130 )   (146 )
Free cash flow   $ 888     $ 832     $ 152     1,720     32  
*   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, equi­ty inco­me on inves­tee, stock-based com­pen­sa­ti­on, and depre­cia­ti­on and amor­tiz­a­ti­on expen­se. The Com­pa­ny also inclu­ded acqui­si­ti­on-rela­ted cos­ts for the quar­ter ended June 27, 2021 and March 27, 2021. 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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