AMD Reports Third Quarter 2021 Financial Results

Reve짯nue increased 54 per짯cent year-over-year 
Gross Mar짯gin grew more than 4 per짯cen짯ta짯ge points year-over-year to 48 percent 

SANTA CLARA, Calif., Oct. 26, 2021 (GLOBE NEWSWIRE)  AMD (NASDAQ: AMD) today announ짯ced reve짯nue for the third quar짯ter of 2021 of $4.3 bil짯li짯on, ope짯ra짯ting inco짯me of $948 mil짯li짯on, net inco짯me of $923 mil짯li짯on and diluted ear짯nings per share of $0.75. On a non-GAAP* basis, ope짯ra짯ting inco짯me was $1.1 bil짯li짯on, net inco짯me was $893 mil짯li짯on and diluted ear짯nings per share were $0.73.

GAAP Quar짯ter짯ly Finan짯cial Results

  Q3 2021 Q3 2020 Y/Y Q2 2021 Q/Q
Reve짯nue ($M) $4,313 $2,801 Up 54% $3,850 Up 12%
Gross pro짯fit ($M) $2,086 $1,230 Up 70% $1,830 Up 14%
Gross mar짯gin % 48% 44% Up 450 bps 48% Up 80 bps
Ope짯ra짯ting expen짯ses ($M) $1,141 $781 Up 46% $1,000 Up 14%
Ope짯ra짯ting inco짯me ($M) $948 $449 Up 111% $831 Up 14%
Ope짯ra짯ting margin % 22% 16% Up 6pp 22% Flat
Net inco짯me ($M) $923 $390 Up 137% $710 Up 30%
Ear짯nings per share $0.75 $0.32 Up 134% $0.58 Up 29%

Non-GAAP* Quar짯ter짯ly Finan짯cial Results

  Q3 2021 Q3 2020 Y/Y Q2 2021 Q/Q
Reve짯nue ($M) $4,313 $2,801 Up 54% $3,850 Up 12%
Gross pro짯fit ($M) $2,087 $1,231 Up 70% $1,832 Up 14%
Gross mar짯gin % 48% 44% Up 440 bps 48% Up 80 bps
Ope짯ra짯ting expen짯ses ($M) $1,035 $706 Up 47% $909 Up 14%
Ope짯ra짯ting inco짯me ($M) $1,055 $525 Up 101% $924 Up 14%
Ope짯ra짯ting margin % 24% 19% Up 5pp 24% Flat
Net inco짯me ($M) $893 $501 Up 78% $778 Up 15%
Ear짯nings per share $0.73 $0.41 Up 78% $0.63 Up 16%

AMD had ano짯ther record quar짯ter as reve짯nue grew 54% and ope짯ra짯ting inco짯me dou짯bled year-over-year, said AMD pre짯si짯dent and CEO Dr. Lisa Su. 3rd Gen EPYC pro짯ces짯sor ship짯ments ram짯ped signi짯fi짯cant짯ly in the quar짯ter as our data cen짯ter sales more than dou짯bled year-over-year. Our busi짯ness signi짯fi짯cant짯ly acce짯le짯ra짯ted in 2021, gro짯wing fas짯ter than the mar짯ket based on our lea짯der짯ship pro짯ducts and con짯sis짯tent execution.

Q3 2021 Results

  • Reve짯nue was $4.3 bil짯li짯on, up 54 per짯cent year-over-year and 12 per짯cent quar짯ter-over-quar짯ter dri짯ven by hig짯her reve짯nue in both the Com짯pu짯ting and Gra짯phics seg짯ment and Enter짯pri짯se, Embedded and Semi-Cus짯tom segment.
  • Gross mar짯gin was 48 per짯cent, up over 400 basis points year-over-year and up 80 basis points quar짯ter-over-quar짯ter. The year-over-year and quar짯ter-over-quar짯ter increa짯ses were pri짯ma짯ri짯ly dri짯ven by a richer mix of EPYC꽓, Ryzen꽓 and Rade짯on꽓 pro짯ces짯sor sales.
  • Ope짯ra짯ting inco짯me was $948 mil짯li짯on com짯pared to ope짯ra짯ting inco짯me of $449 mil짯li짯on a year ago and $831 mil짯li짯on in the pri짯or quar짯ter. Non-GAAP ope짯ra짯ting inco짯me was $1.1 bil짯li짯on com짯pared to $525 mil짯li짯on a year ago and $924 mil짯li짯on in the pri짯or quar짯ter. Ope짯ra짯ting inco짯me impro짯ve짯ments were pri짯ma짯ri짯ly dri짯ven by hig짯her revenue.
  • Net inco짯me was $923 mil짯li짯on com짯pared to $390 mil짯li짯on a year ago and $710 mil짯li짯on in the pri짯or quar짯ter. Non-GAAP net inco짯me was $893 mil짯li짯on com짯pared to $501 mil짯li짯on a year ago and $778 mil짯li짯on in the pri짯or quarter.
  • Diluted ear짯nings per share was $0.75 com짯pared to $0.32 a year ago and $0.58 in the pri짯or quar짯ter. Non-GAAP diluted ear짯nings per share was $0.73 com짯pared to $0.41 a year ago and $0.63 in the pri짯or quarter.
  • Cash, cash equi짯va짯lents and short-term invest짯ments were $3.6 bil짯li짯on at the end of the quar짯ter. The Com짯pa짯ny repurcha짯sed more than 7 mil짯li짯on shares of com짯mon stock for $750 mil짯li짯on during the quarter.
  • Cash from ope짯ra짯ti짯ons was $849 mil짯li짯on com짯pared to $339 mil짯li짯on a year ago and $952 mil짯li짯on in the pri짯or quar짯ter. Free cash flow was $764 mil짯li짯on com짯pared to $265 mil짯li짯on a year ago and $888 mil짯li짯on in the pri짯or quar짯ter. Third quar짯ter 2021 cash from ope짯ra짯ti짯ons and free cash flow included stra짯te짯gic invest짯ments in long-term sup짯p짯ly chain capa짯ci짯ty to sup짯port future reve짯nue growth.

Quar짯ter짯ly Finan짯cial Seg짯ment Summary

  • Com짯pu짯ting and Gra짯phics seg짯ment reve짯nue was $2.4 bil짯li짯on, up 44 per짯cent year-over-year and 7 per짯cent quar짯ter-over-quar짯ter. The year-over-year and quar짯ter-over-quar짯ter increa짯ses were dri짯ven by hig짯her Ryzen, Rade짯on and AMD Instinct pro짯ces짯sor sales. 
    • Cli짯ent pro짯ces짯sor avera짯ge sel짯ling pri짯ce (ASP) grew year-over-year and quar짯ter-over-quar짯ter dri짯ven by a richer mix of Ryzen pro짯ces짯sor sales.
    • GPU ASP grew year-over-year and quar짯ter-over-quar짯ter dri짯ven by high-end Rade짯on gra짯phics pro짯duct sales and AMD Instinct data cen짯ter GPU sales.
    • Ope짯ra짯ting inco짯me was $513 mil짯li짯on com짯pared to $384 mil짯li짯on a year ago and $526 mil짯li짯on in the pri짯or quar짯ter. The year-over-year increase was pri짯ma짯ri짯ly dri짯ven by hig짯her reve짯nue, par짯ti짯al짯ly off짯set by hig짯her ope짯ra짯ting expen짯ses. The quar짯ter-over-quar짯ter decrease was pri짯ma짯ri짯ly due to hig짯her ope짯ra짯ting expenses.
  • Enter짯pri짯se, Embedded and Semi-Cus짯tom seg짯ment reve짯nue was $1.9 bil짯li짯on, up 69 per짯cent year-over-year and 20 per짯cent quar짯ter-over-quar짯ter. The increa짯ses were dri짯ven by hig짯her EPYC pro짯ces짯sor and semi-cus짯tom pro짯duct sales. 
    • Ope짯ra짯ting inco짯me was $542 mil짯li짯on com짯pared to $141 mil짯li짯on a year ago and $398 mil짯li짯on in the pri짯or quar짯ter. The increa짯ses were pri짯ma짯ri짯ly dri짯ven by hig짯her reve짯nue and richer pro짯duct mix, par짯ti짯al짯ly off짯set by hig짯her ope짯ra짯ting expenses.
  • All Other ope짯ra짯ting loss was $107 mil짯li짯on com짯pared to $76 mil짯li짯on a year ago and $93 mil짯li짯on in the pri짯or quarter.

Recent PR Highlights

  • AMD saw increased adop짯ti짯on of AMD EPYC pro짯ces짯sors in the third quarter. 
    • Argon짯ne Natio짯nal Labs sel짯ec짯ted AMD EPYC pro짯ces짯sors to power a new super짯com짯pu짯ter, known as Pola짯ris, to allow sci짯en짯tists and deve짯lo짯pers to test and opti짯mi짯ze soft짯ware codes and appli짯ca짯ti짯ons for AI, engi짯nee짯ring, and sci짯en짯ti짯fic projects.
    • Goog짯le Cloud announ짯ced the public pre짯view of N2D Vir짯tu짯al Machi짯nes powered by AMD EPYC꽓 7003 Series processors.
    • AMD announ짯ced that 2nd Gen AMD EPYC CPUs and AMD Rade짯on Pro V520 GPUs will power new sizes for Ama짯zon EC2 G4ad ins짯tances, giving cus짯to짯mers the fle짯xi짯bi짯li짯ty to pro짯vi짯si짯on resour짯ces on demand, as needs dic짯ta짯te, rather than being limi짯t짯ed to their inven짯to짯ry of phy짯si짯cal, on-pre짯mi짯se hardware.
    • Cloud짯fla짯re cho짯se 3rd Gen AMD EPYC pro짯ces짯sors for its 11th Gen ser짯vers, which power the company셲 DNS network.
  • AMD part짯ne짯red with Micro짯soft to bring powerful, relia짯ble com짯pu짯ting to users with Win짯dows 11, powered by Ryzen pro짯ces짯sors and Rade짯on gra짯phics. Through this col짯la짯bo짯ra짯ti짯on, more than 175 AMD CPUs are now com짯pa짯ti짯ble with Win짯dows 11 ope짯ra짯ting sys짯tems to dri짯ve ulti짯ma짯te PC and gam짯ing experiences.
  • Cus짯to짯mer adop짯ti짯on of Ryzen pro짯ces짯sors expan짯ded, with Leno짯vo start짯ing ship짯ments of the Ryzen-based Think짯book and Think짯pad E series busi짯ness lap짯tops fea짯turing Win짯dows 11 , Leno짯vo announ짯cing the Ryzen-powered Yoga Slim 7 Car짯bon and Yoga Slim 7 Pro, HP releasing two AiO devices with Ryzen pro짯ces짯sors and ASUS unvei짯ling the Ryzen 5000 Series-based Zen짯book, Zen짯book PRO, Pro짯Art Stu짯dio짯Book and VivoBook.
  • AMD laun짯ched Ryzen 5000 G멣eries Desk짯top Pro짯ces짯sors with Rade짯on Gra짯phics, brin짯ging high-per짯for짯mance inte짯gra짯ted gra짯phics and powerful fea짯tures to satis짯fy the most deman짯ding gamers, crea짯tors and enthusiasts.
  • AMD laun짯ched the Rade짯on RX 6600 XT gra짯phics card, desi짯gned to deli짯ver high-frame짯ra짯te, high-fide짯li짯ty 1080p gam짯ing expe짯ri짯en짯ces. Built on breakth짯rough AMD RDNA꽓 2 gam짯ing archi짯tec짯tu짯re, the gra짯phics card offers on avera짯ge 11 per짯cent hig짯her gam짯ing per짯for짯mance with Smart Access Memo짯ry enab짯led across a ran짯ge of popu짯lar titles com짯pared to the competition.
  • AMD announ짯ced avai짯la짯bi짯li짯ty of the Rade짯on PRO W6000X series GPUs for Mac Pro, harnes짯sing the high-per짯for짯mance AMD RDNA 2 archi짯tec짯tu짯re, AMD Infi짯ni짯ty Cache and other advan짯ced tech짯no짯lo짯gies to power deman짯ding pro짯fes짯sio짯nal design and con짯tent crea짯ti짯on workloads.
  • AMD was named by For짯bes as one of the World셲 Best Employ짯ers of 2021.
  • AMD announ짯ced its 26th annu짯al Cor짯po짯ra짯te Respon짯si짯bi짯li짯ty Report high짯light짯ing AMD셲 accom짯plish짯ments from the pre짯vious year and unvei짯ling new goals through 2025 and 2030, inclu짯ding a new goal to increase ener짯gy effi짯ci짯en짯cy of pro짯ces짯sors run짯ning AI trai짯ning and high per짯for짯mance com짯pu짯ting appli짯ca짯ti짯ons 30x by 2025.

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 fourth quar짯ter 2021, AMD expects reve짯nue to be appro짯xi짯m짯ate짯ly $4.5 bil짯li짯on, plus or minus $100 mil짯li짯on, an increase of appro짯xi짯m짯ate짯ly 39 per짯cent year-over-year and appro짯xi짯m짯ate짯ly 4 per짯cent quar짯ter-over-quar짯ter. The year-over-year increase is expec짯ted to be dri짯ven by growth across all busi짯nesses. The quar짯ter-over-quar짯ter increase is expec짯ted to be dri짯ven by hig짯her ser짯ver and semi-cus짯tom reve짯nue. AMD expects non-GAAP gross mar짯gin to be appro짯xi짯m짯ate짯ly 49.5 per짯cent in the fourth quar짯ter 2021.

For the full year 2021, AMD now expects reve짯nue to grow appro짯xi짯m짯ate짯ly 65 per짯cent dri짯ven by growth across all busi짯nesses, up from pri짯or gui짯dance of 60 per짯cent growth. AMD expects non-GAAP gross mar짯gin to be appro짯xi짯m짯ate짯ly 48 per짯cent for the full year 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 third quar짯ter 2021 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.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In mil짯li짯ons, except per share data) (Unau짯di짯ted)    
    Three Months Ended
    Sep짯tem짯ber 25,
2021
  June 26,
2021
  Sep짯tem짯ber 26,
2020
GAAP gross profit   $ 2,086     $ 1,830     $ 1,230  
GAAP gross margin %   48 %   48 %   44 %
Stock-based com짯pen짯sa짯ti짯on   1     2     1  
Non-GAAP gross profit   $ 2,087     $ 1,832     $ 1,231  
Non-GAAP gross margin %   48 %   48 %   44 %
             
GAAP ope짯ra짯ting expenses   $ 1,141     $ 1,000     $ 781  
GAAP ope짯ra짯ting expenses/revenue %   26 %   26 %   28 %
Stock-based com짯pen짯sa짯ti짯on   98     81     75  
Acqui짯si짯ti짯on-rela짯ted costs   8     10      
Non-GAAP ope짯ra짯ting expenses   $ 1,035     $ 909     $ 706  
Non-GAAP ope짯ra짯ting expenses/revenue%   24 %   24 %   25 %
             
GAAP ope짯ra짯ting income   $ 948     $ 831     $ 449  
GAAP ope짯ra짯ting margin %   22 %   22 %   16 %
Stock-based com짯pen짯sa짯ti짯on   99     83     76  
Acqui짯si짯ti짯on-rela짯ted costs   8     10      
Non-GAAP ope짯ra짯ting income   $ 1,055     $ 924     $ 525  
Non-GAAP ope짯ra짯ting margin %   24 %   24 %   19 %
             

 

    Three Months Ended
    Sep짯tem짯ber 25,
2021
  June 26,
2021
  Sep짯tem짯ber 26,
2020
GAAP net inco짯me / ear짯nings per share   $ 923     $ 0.75     $ 710     $ 0.58     $ 390     $ 0.32  
Loss on debt redemption/conversion           1         38     0.03  
(Gains) los짯ses on equi짯ty invest짯ments, net   (60 )   (0.05 )                
Non-cash inte짯rest expen짯se rela짯ted to con짯ver짯ti짯ble debt                   2      
Stock-based com짯pen짯sa짯ti짯on   99     0.08     83     0.06     76     0.06  
Equi짯ty inco짯me in investee   (2 )       (2 )       (1 )    
Acqui짯si짯ti짯on-rela짯ted costs   8     0.01     10     0.01          
Inco짯me tax provision   (75 )   (0.06 )   (24 )   (0.02 )   (4 )    
Non-GAAP net inco짯me / ear짯nings per share   $ 893     $ 0.73     $ 778     $ 0.63     $ 501     $ 0.41  
                         
Shares used and net inco짯me adjus짯t짯ment in
ear짯nings per share cal짯cu짯la짯ti짯on (1)
                       
Shares used in per share cal짯cu짯la짯ti짯on (GAAP)   1,230     1,232     1,215  
Inte짯rest expen짯se add-back to GAAP net income   $     $     $ 1  
Shares used in per share cal짯cu짯la짯ti짯on (Non-GAAP)   1,230     1,232     1,230  
Inte짯rest expen짯se add-back to Non-GAAP net income   $     $     $ 1  

 

(1 )   For the three months ended Sep짯tem짯ber 26, 2020, GAAP diluted EPS cal짯cu짯la짯ti짯ons include 11 mil짯li짯on rela짯ted to the Company셲 2026 Con짯ver짯ti짯ble Notes and the asso짯cia짯ted $1 mil짯li짯on inte짯rest expen짯se add-back to net inco짯me under the 쐇f con짯ver짯ted method. For the three months ended Sep짯tem짯ber 26, 2020, 15 mil짯li짯on shares rela짯ted to 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 Sep짯tem짯ber 26, 2020, Non-GAAP diluted EPS cal짯cu짯la짯ti짯ons include 26 mil짯li짯on shares rela짯ted to the Company셲 2026 Con짯ver짯ti짯ble Notes and the asso짯cia짯ted $1 mil짯li짯on inte짯rest expen짯se 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 the fea짯tures, func짯tion짯a짯li짯ty, per짯for짯mance, avai짯la짯bi짯li짯ty, timing and expec짯ted bene짯fits of AMD pro짯ducts; AMD셲 goal to increase ener짯gy effi짯ci짯en짯cy of pro짯ces짯sors run짯ning AI trai짯ning and high per짯for짯mance com짯pu짯ting appli짯ca짯ti짯ons 30x by 2025; and AMD셲 expec짯ted fourth 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 pre짯sen짯ta짯ti짯on 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; glo짯bal eco짯no짯mic uncer짯tain짯ty; the loss of a signi짯fi짯cant cus짯to짯mer; the impact of the COVID-19 pan짯de짯mic on AMD셲 busi짯ness, finan짯cial con짯di짯ti짯on and results of ope짯ra짯ti짯ons; the com짯pe짯ti짯ti짯ve mar짯kets in which AMD셲 pro짯ducts are sold; quar짯ter짯ly and sea짯so짯nal sales pat짯terns; mar짯ket con짯di짯ti짯ons of the indus짯tries in which AMD pro짯ducts are sold; the cycli짯cal natu짯re of the semi짯con짯duc짯tor indus짯try; AMD셲 abili짯ty to ade짯qua짯te짯ly pro짯tect its tech짯no짯lo짯gy or other intellec짯tu짯al pro짯per짯ty; unfa짯vorable cur짯ren짯cy exch짯an짯ge rate fluc짯tua짯tions; the abili짯ty of third par짯ty manu짯fac짯tu짯r짯ers to manu짯fac짯tu짯re AMD셲 pro짯ducts on a time짯ly basis in suf짯fi짯ci짯ent quan짯ti짯ties and using com짯pe짯ti짯ti짯ve tech짯no짯lo짯gies; the avai짯la짯bi짯li짯ty of essen짯ti짯al equip짯ment, mate짯ri짯als, sub짯stra짯tes or manu짯fac짯tu짯ring pro짯ces짯ses; expec짯ted manu짯fac짯tu짯ring yields for AMD셲 pro짯ducts; AMD셲 abili짯ty to intro짯du짯ce pro짯ducts on a time짯ly basis with fea짯tures and per짯for짯mance levels that pro짯vi짯de value to its cus짯to짯mers; AMD셲 abili짯ty to gene짯ra짯te reve짯nue from its semi-cus짯tom SoC pro짯ducts; poten짯ti짯al secu짯ri짯ty vul짯nerabi짯li짯ties; poten짯ti짯al IT outa짯ges, data loss, data brea짯ches and cyber-attacks; uncer짯tain짯ties invol짯ving the orde짯ring and ship짯ment of AMD셲 pro짯ducts; 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 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 abili짯ty to effec짯tively con짯trol the sales of its pro짯ducts on the gray mar짯ket; the impact of govern짯ment actions and regu짯la짯ti짯ons such as export admi짯nis짯tra짯ti짯on regu짯la짯ti짯ons, tariffs and trade pro짯tec짯tion mea짯su짯res; AMD셲 abili짯ty to rea짯li짯ze its defer짯red tax assets; poten짯ti짯al tax lia짯bi짯li짯ties; cur짯rent and future claims and liti짯ga짯ti짯on; the impact of envi짯ron짯men짯tal laws, con짯flict mine짯rals-rela짯ted pro짯vi짯si짯ons and other laws or regu짯la짯ti짯ons; the impact of acqui짯si짯ti짯ons, joint ven짯tures and/or invest짯ments on AMD셲 busi짯ness, inclu짯ding the announ짯ced acqui짯si짯ti짯on of 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; the impact of any impair짯ment of the com짯bi짯ned company셲 assets on the com짯bi짯ned company셲 finan짯cial posi짯ti짯on and results of ope짯ra짯ti짯on; the rest짯ric짯tions impo짯sed by agree짯ments gover짯ning AMD셲 notes and the revol짯ving cre짯dit faci짯li짯ty; 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; AMD셲 abili짯ty to gene짯ra짯te suf짯fi짯ci짯ent reve짯nue and ope짯ra짯ting cash flow or obtain exter짯nal finan짯cing for rese짯arch and deve짯lo짯p짯ment or other stra짯te짯gic invest짯ments; poli짯ti짯cal, legal, eco짯no짯mic risks and natu짯ral dis짯as짯ters; future impairm짯ents of good짯will and tech짯no짯lo짯gy licen짯se purcha짯ses; AMD셲 abili짯ty to attract and retain qua짯li짯fied per짯son짯nel; AMD셲 stock pri짯ce vola짯ti짯li짯ty; and world짯wi짯de poli짯ti짯cal con짯di짯ti짯ons. Inves짯tors are urged to review in detail the risks and uncer짯tain짯ties in AMD셲 Secu짯ri짯ties and Exch짯an짯ge Com짯mis짯si짯on filings, inclu짯ding but not limi짯t짯ed to AMD셲 most recent reports on Forms 10멚 and 10멡.

 

*   In this ear짯nings press release, in addi짯ti짯on to GAAP finan짯cial results, AMD has pro짯vi짯ded non-GAAP finan짯cial mea짯su짯res inclu짯ding non-GAAP gross pro짯fit, 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 fis짯cal 2021, AMD uses a pro짯jec짯ted non-GAAP tax rate of 15%, which excludes the tax impact of pre-tax non-GAAP adjus짯t짯ments, reflec짯ting curr짯ent짯ly available infor짯ma짯ti짯on. 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 Octo짯ber 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, AMD 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   Nine Months Ended  
    Sep짯tem짯ber 25,
2021
  June 26,
2021
  Sep짯tem짯ber 26,
2020
  Sep짯tem짯ber 25,
2021
  Sep짯tem짯ber 26,
2020
 
Net reve짯nue   $ 4,313     $ 3,850     $ 2,801     $ 11,608     $ 6,519    
Cost of sales   2,227     2,020     1,571     6,105     3,623    
Gross pro짯fit   2,086     1,830     1,230     5,503     2,896    
Gross mar짯gin %   48 %   48 %   44 %   47 %   44 %  
Rese짯arch and development   765     659     508     2,034     1,410    
Mar짯ke짯ting, gene짯ral and administrative   376     341     273     1,036     687    
Licen짯sing gain   (3 )   (1 )       (8 )      
Ope짯ra짯ting income   948     831     449     2,441     799    
Inte짯rest expense   (7 )   (10 )   (11 )   (26 )   (38 )  
Other inco짯me (expen짯se), net   62         (37 )   51     (32 )  
Inco짯me befo짯re inco짯me taxes and equi짯ty income   1,003     821     401     2,466     729    
Inco짯me tax provision   82     113     12     284     22    
Equi짯ty inco짯me in investee   2     2     1     6     2    
Net Inco짯me   $ 923     $ 710     $ 390     $ 2,188     $ 709    
Ear짯nings per share                      
Basic   $ 0.76     $ 0.58     $ 0.33     $ 1.80     $ 0.60    
Diluted   $ 0.75     $ 0.58     $ 0.32     $ 1.78     $ 0.59    
Shares used in per share calculation                      
Basic   1,214     1,216     1,184     1,214     1,176    
Diluted   1,230     1,232     1,215     1,231     1,208    

 

 

ADVANCED MICRO DEVICES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Mil짯li짯ons)
    Sep짯tem짯ber 25,
2021
  Decem짯ber 26,
2020
    (Unau짯di짯ted)    
ASSETS        
Cur짯rent assets:        
Cash and cash equivalents   $ 2,440     $ 1,595  
Short-term invest짯ments   1,168     695  
Accounts receiva짯ble, net   2,224     2,066  
Invent짯ories   1,902     1,399  
Receiv짯a짯bles from rela짯ted parties   5     10  
Pre짯paid expen짯ses and other cur짯rent assets   249     378  
Total cur짯rent assets   7,988     6,143  
Pro짯per짯ty and equip짯ment, net   717     641  
Ope짯ra짯ting lea짯se right-of use assets   284     208  
Good짯will   289     289  
Invest짯ment: equi짯ty method   69     63  
Defer짯red tax assets   1,036     1,245  
Other non-cur짯rent assets   770     373  
Total Assets   $ 11,153     $ 8,962  
         
LIABILITIES AND STOCKHOLDERS EQUITY        
Cur짯rent liabilities:        
Accounts paya짯ble   $ 1,048     $ 468  
Paya짯bles to rela짯ted parties   36     78  
Accrued lia짯bi짯li짯ties   2,048     1,796  
Short-term debt   312      
Other cur짯rent liabilities   120     75  
Total cur짯rent liabilities   3,564     2,417  
Long-term debt, net   1     330  
Long-term ope짯ra짯ting lea짯se liabilities   269     201  
Other long-term liabilities   183     177  
         
Stock짯hol짯ders equity:        
Capi짯tal stock:        
Com짯mon stock, par value   12     12  
Addi짯tio짯nal paid-in capital   10,905     10,544  
Tre짯asu짯ry stock, at cost   (1,356 )   (131 )
Accu짯mu짯la짯ted defi짯cit (1)   (2,425 )   (4,605 )
Accu짯mu짯la짯ted other com짯pre짯hen짯si짯ve income       17  
Total stock짯hol짯ders equity   $ 7,136     $ 5,837  
Total Lia짯bi짯li짯ties and Stock짯hol짯ders Equity   $ 11,153     $ 8,962  

 

(1)   During the first quar짯ter of 2021, the Com짯pa짯ny adopted ASU 2019-12, Inco짯me Taxes (Topic 740): Sim짯pli짯fy짯ing the Accoun짯ting for Inco짯me Taxes, using the modi짯fied retro짯s짯pec짯ti짯ve adop짯ti짯on method, which resul짯ted in $8 mil짯li짯on of defer짯red tax lia짯bi짯li짯ty asso짯cia짯ted with book-tax dif짯fe짯ren짯ces in a for짯eign equi짯ty method invest짯ment reco짯gni짯zed in Accu짯mu짯la짯ted deficit.

 

 

ADVANCED MICRO DEVICES, INC.
SELECTED CASH FLOW INFORMATION
(Mil짯li짯ons) (Unau짯di짯ted)
    Three Months Ended   Nine Months Ended
    Sep짯tem짯ber 25,
2021
  June 26,
2021
  Sep짯tem짯ber 26,
2020
  Sep짯tem짯ber 25,
2021
  Sep짯tem짯ber 26,
2020
Net cash pro짯vi짯ded by (used in)                    
Ope짯ra짯ting activities   $ 849     $ 952     $ 339     $ 2,699     $ 517  
Inves짯t짯ing activities   $ (83 )   $ 119     $ (549 )   $ (686 )   $ (658 )
Finan짯cing activities   $ (949 )   $ (211 )   $ (269 )   $ (1,168 )   $ (29 )

 

 

SELECTED CORPORATE DATA
(Mil짯li짯ons) (Unau짯di짯ted)
    Three Months Ended   Nine Months Ended
    Sep짯tem짯ber 25,
2021
  June 26,
2021
  Sep짯tem짯ber 26,
2020
  Sep짯tem짯ber 25,
2021
  Sep짯tem짯ber 26,
2020
Seg짯ment Information                    
Com짯pu짯ting and Gra짯phics (1)                    
Net reve짯nue   $ 2,398     $ 2,250     $ 1,667     $ 6,748     $ 4,472  
Ope짯ra짯ting income   $ 513     $ 526     $ 384     $ 1,524     $ 846  
Enter짯pri짯se, Embedded and Semi-Cus짯tom (2)                    
Net reve짯nue   $ 1,915     $ 1,600     $ 1,134     $ 4,860     $ 2,047  
Ope짯ra짯ting income   $ 542     $ 398     $ 141     $ 1,217     $ 148  
All Other (3)                    
Net reve짯nue   $     $     $     $     $  
Ope짯ra짯ting loss   $ (107 )   $ (93 )   $ (76 )   $ (300 )   $ (195 )
Total                    
Net reve짯nue   $ 4,313     $ 3,850     $ 2,801     $ 11,608     $ 6,519  
Ope짯ra짯ting income   $ 948     $ 831     $ 449     $ 2,441     $ 799  
                     
                     
Other Data                    
Capi짯tal expenditures   $ 85     $ 64     $ 74     $ 215     $ 220  
Adjus짯ted EBITDA (4)   $ 1,152     $ 1,021     $ 607     $ 3,030     $ 1,216  
Cash, cash equi짯va짯lents and short-term investments   $ 3,608     $ 3,793     $ 1,771     $ 3,608     $ 1,771  
Free cash flow (5)   $ 764     $ 888     $ 265     $ 2,484     $ 297  
Total assets   $ 11,153     $ 10,691     $ 7,023     $ 11,153     $ 7,023  
Total debt   $ 313     $ 313     $ 373     $ 313     $ 373  

 

(1)   The Com짯pu짯ting and Gra짯phics seg짯ment pri짯ma짯ri짯ly includes desk짯top and note짯book micro짯pro짯ces짯sors, acce짯le짯ra짯ted pro짯ces짯sing units that inte짯gra짯te micro짯pro짯ces짯sors and gra짯phics, chip짯sets, dis짯crete 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 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   Nine Months Ended
    Sep짯tem짯ber 25,
2021
  June 26,
2021
  Sep짯tem짯ber 26,
2020
  Sep짯tem짯ber 25,
2021
  Sep짯tem짯ber 26,
2020
GAAP net income   $ 923     $ 710     $ 390     $ 2,188     $ 709  
Inte짯rest expense   7     10     11     26     38  
Other (inco짯me) expen짯se, net   (62 )       37     (51 )   32  
Inco짯me tax provision   82     113     12     284     22  
Equi짯ty inco짯me in investee   (2 )   (2 )   (1 )   (6 )   (2 )
Stock-based com짯pen짯sa짯ti짯on   99     83     76     267     195  
Depre짯cia짯ti짯on and amortization   97     97     82     289     222  
Acqui짯si짯ti짯on-rela짯ted costs   8     10         33      
Adjus짯ted EBITDA   $ 1,152     $ 1,021     $ 607     $ 3,030     $ 1,216  

 

 

(5) Recon짯ci짯lia짯ti짯on of GAAP Net Cash Pro짯vi짯ded by Ope짯ra짯ting Acti짯vi짯ties to Free Cash Flow**
    Three Months Ended   Nine Months Ended
    Sep짯tem짯ber 25,
2021
  June 26,
2021
  Sep짯tem짯ber 26,
2020
  Sep짯tem짯ber 25,
2021
  Sep짯tem짯ber 26,
2020
GAAP net cash pro짯vi짯ded by ope짯ra짯ting activities   $ 849     $ 952     $ 339     2,699     517  
Purcha짯ses of pro짯per짯ty and equipment   (85 )   (64 )   (74 )   (215 )   (220 )
Free cash flow   $ 764     $ 888     $ 265     2,484     297  

 

*   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 inco짯me (expen짯se), net, inco짯me tax pro짯vi짯si짯on, equi짯ty inco짯me in inves짯tee, stock-based com짯pen짯sa짯ti짯on, and depre짯cia짯ti짯on and amor짯tiza짯ti짯on expen짯se. The Com짯pa짯ny also included acqui짯si짯ti짯on-rela짯ted cos짯ts for the three months ended Sep짯tem짯ber 25, 2021 and June 26, 2021. 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.