AMD Reports Third Quarter 2021 Financial Results

— Reve­nue incre­a­sed 54 per­cent year-over-year —
— Gross Mar­gin grew more than 4 per­cen­ta­ge points year-over-year to 48 percent —

SANTA CLARA, Calif., Oct. 26, 2021 (GLOBE NEWSWIRE) — AMD (NASDAQ: AMD) today announ­ced reve­nue for the third quar­ter of 2021 of $4.3 bil­li­on, ope­ra­ting inco­me of $948 mil­li­on, net inco­me of $923 mil­li­on and dilu­t­ed ear­nings per share of $0.75. On a non-GAAP* basis, ope­ra­ting inco­me was $1.1 bil­li­on, net inco­me was $893 mil­li­on and dilu­t­ed ear­nings per share were $0.73.

GAAP Quar­ter­ly Finan­cial Results

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

Non-GAAP* Quar­ter­ly Finan­cial Results

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

AMD had ano­t­her record quar­ter as reve­nue grew 54% and ope­ra­ting inco­me dou­bled year-over-year,” said AMD pre­si­dent and CEO Dr. Lisa Su. “3rd Gen EPYC pro­ces­sor ship­ments ram­ped signi­fi­cant­ly in the quar­ter as our data cen­ter sales more than dou­bled year-over-year. Our busi­ness signi­fi­cant­ly acce­le­ra­ted in 2021, gro­wing fas­ter than the mar­ket based on our lea­ders­hip pro­ducts and con­sis­tent execution.”

Q3 2021 Results

  • Reve­nue was $4.3 bil­li­on, up 54 per­cent year-over-year and 12 per­cent quar­ter-over-quar­ter dri­ven by hig­her reve­nue in both the Com­pu­ting and Gra­phics seg­ment and Enter­pri­se, Embed­ded and Semi-Cus­tom segment.
  • Gross mar­gin was 48 per­cent, up over 400 basis points year-over-year and up 80 basis points quar­ter-over-quar­ter. The year-over-year and quar­ter-over-quar­ter incre­a­ses were pri­ma­ri­ly dri­ven by a richer mix of EPYC™, Ryzen™ and Rade­on™ pro­ces­sor sales.
  • Ope­ra­ting inco­me was $948 mil­li­on com­pa­red to ope­ra­ting inco­me of $449 mil­li­on a year ago and $831 mil­li­on in the pri­or quar­ter. Non-GAAP ope­ra­ting inco­me was $1.1 bil­li­on com­pa­red to $525 mil­li­on a year ago and $924 mil­li­on in the pri­or quar­ter. Ope­ra­ting inco­me impro­ve­ments were pri­ma­ri­ly dri­ven by hig­her revenue.
  • Net inco­me was $923 mil­li­on com­pa­red to $390 mil­li­on a year ago and $710 mil­li­on in the pri­or quar­ter. Non-GAAP net inco­me was $893 mil­li­on com­pa­red to $501 mil­li­on a year ago and $778 mil­li­on in the pri­or quarter.
  • Dilu­t­ed ear­nings per share was $0.75 com­pa­red to $0.32 a year ago and $0.58 in the pri­or quar­ter. Non-GAAP dilu­t­ed ear­nings per share was $0.73 com­pa­red to $0.41 a year ago and $0.63 in the pri­or quarter.
  • Cash, cash equi­va­lents and short-term invest­ments were $3.6 bil­li­on at the end of the quar­ter. The Com­pa­ny repurcha­sed more than 7 mil­li­on shares of com­mon stock for $750 mil­li­on during the quarter.
  • Cash from ope­ra­ti­ons was $849 mil­li­on com­pa­red to $339 mil­li­on a year ago and $952 mil­li­on in the pri­or quar­ter. Free cash flow was $764 mil­li­on com­pa­red to $265 mil­li­on a year ago and $888 mil­li­on in the pri­or quar­ter. Third quar­ter 2021 cash from ope­ra­ti­ons and free cash flow inclu­ded stra­te­gic invest­ments in long-term sup­ply chain capa­ci­ty to sup­port future reve­nue growth.

Quar­ter­ly Finan­cial Seg­ment Summary

  • Com­pu­ting and Gra­phics seg­ment reve­nue was $2.4 bil­li­on, up 44 per­cent year-over-year and 7 per­cent quar­ter-over-quar­ter. The year-over-year and quar­ter-over-quar­ter incre­a­ses were dri­ven by hig­her Ryzen, Rade­on and AMD Instinct pro­ces­sor sales. 
    • Cli­ent pro­ces­sor average sel­ling pri­ce (ASP) grew year-over-year and quar­ter-over-quar­ter dri­ven by a richer mix of Ryzen pro­ces­sor sales.
    • GPU ASP grew year-over-year and quar­ter-over-quar­ter dri­ven by high-end Rade­on gra­phics pro­duct sales and AMD Instinct data cen­ter GPU sales.
    • Ope­ra­ting inco­me was $513 mil­li­on com­pa­red to $384 mil­li­on a year ago and $526 mil­li­on in the pri­or quar­ter. The year-over-year incre­a­se was pri­ma­ri­ly dri­ven by hig­her reve­nue, par­ti­al­ly off­set by hig­her ope­ra­ting expen­ses. The quar­ter-over-quar­ter decre­a­se was pri­ma­ri­ly due to hig­her ope­ra­ting expenses.
  • Enter­pri­se, Embed­ded and Semi-Cus­tom seg­ment reve­nue was $1.9 bil­li­on, up 69 per­cent year-over-year and 20 per­cent quar­ter-over-quar­ter. The incre­a­ses were dri­ven by hig­her EPYC pro­ces­sor and semi-cus­tom pro­duct sales. 
    • Ope­ra­ting inco­me was $542 mil­li­on com­pa­red to $141 mil­li­on a year ago and $398 mil­li­on in the pri­or quar­ter. The incre­a­ses were pri­ma­ri­ly dri­ven by hig­her reve­nue and richer pro­duct mix, par­ti­al­ly off­set by hig­her ope­ra­ting expenses.
  • All Other ope­ra­ting loss was $107 mil­li­on com­pa­red to $76 mil­li­on a year ago and $93 mil­li­on in the pri­or quarter.

Recent PR Highlights

  • AMD saw incre­a­sed adop­ti­on of AMD EPYC pro­ces­sors in the third quarter. 
    • Argon­ne Natio­nal Labs selec­ted AMD EPYC pro­ces­sors to power a new super­com­pu­ter, known as Pola­ris, to allow sci­en­tists and deve­lo­pers to test and opti­mi­ze soft­ware codes and app­li­ca­ti­ons for AI, engi­nee­ring, and sci­en­ti­fic projects.
    • Goog­le Cloud announ­ced the public pre­view of N2D Vir­tu­al Machi­nes powe­red by AMD EPYC™ 7003 Seri­es processors.
    • AMD announ­ced that 2nd Gen AMD EPYC CPUs and AMD Rade­on Pro V520 GPUs will power new sizes for Ama­zon EC2 G4ad instan­ces, giving cus­to­mers the fle­xi­bi­li­ty to pro­vi­si­on resour­ces on demand, as needs dic­ta­te, rather than being limi­ted to their inven­to­ry of phy­si­cal, on-pre­mi­se hardware.
    • Cloud­fla­re cho­se 3rd Gen AMD EPYC pro­ces­sors for its 11th Gen ser­vers, which power the company’s DNS network.
  • AMD part­ne­red with Micro­soft to bring power­ful, reli­able com­pu­ting to users with Win­dows 11, powe­red by Ryzen pro­ces­sors and Rade­on gra­phics. Through this col­la­bo­ra­ti­on, more than 175 AMD CPUs are now com­pa­ti­ble with Win­dows 11 ope­ra­ting sys­tems to dri­ve ulti­ma­te PC and gaming experiences.
  • Cus­to­mer adop­ti­on of Ryzen pro­ces­sors expan­ded, with Leno­vo star­ting ship­ments of the Ryzen-based Think­book and Think­pad E seri­es busi­ness lap­tops fea­turing Win­dows 11 , Leno­vo announ­cing the Ryzen-powe­red Yoga Slim 7 Car­bon and Yoga Slim 7 Pro, HP releasing two AiO devices with Ryzen pro­ces­sors and ASUS unvei­ling the Ryzen 5000 Seri­es-based Zen­book, Zen­book PRO, Pro­Art Stu­dio­Book and VivoBook.
  • AMD laun­ched Ryzen 5000 G‑Series Desk­top Pro­ces­sors with Rade­on Gra­phics, brin­ging high-per­for­mance inte­gra­ted gra­phics and power­ful fea­tures to satisfy the most deman­ding gamers, creators and enthusiasts.
  • AMD laun­ched the Rade­on RX 6600 XT gra­phics card, desi­gned to deli­ver high-frame­ra­te, high-fide­li­ty 1080p gaming expe­ri­en­ces. Built on bre­akthrough AMD RDNA™ 2 gaming archi­tec­tu­re, the gra­phics card offers on average 11 per­cent hig­her gaming per­for­mance with Smart Access Memo­ry enab­led across a ran­ge of popu­lar tit­les com­pa­red to the competition.
  • AMD announ­ced avai­la­bi­li­ty of the Rade­on PRO W6000X seri­es GPUs for Mac Pro, harn­essing the high-per­for­mance AMD RDNA 2 archi­tec­tu­re, AMD Infi­ni­ty Cache and other advan­ced tech­no­lo­gies to power deman­ding pro­fes­sio­nal design and con­tent crea­ti­on workloads.
  • AMD was named by For­bes as one of the World’s Best Employ­ers of 2021.
  • AMD announ­ced its 26th annu­al Cor­po­ra­te Respon­si­bi­li­ty Report high­ligh­t­ing AMD’s accom­plish­ments from the pre­vious year and unvei­ling new goals through 2025 and 2030, inclu­ding a new goal to incre­a­se ener­gy effi­ci­en­cy of pro­ces­sors run­ning AI trai­ning and high per­for­mance com­pu­ting app­li­ca­ti­ons 30x by 2025.

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 fourth quar­ter 2021, AMD expects reve­nue to be appro­xi­mate­ly $4.5 bil­li­on, plus or minus $100 mil­li­on, an incre­a­se of appro­xi­mate­ly 39 per­cent year-over-year and appro­xi­mate­ly 4 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 dri­ven by hig­her ser­ver and semi-cus­tom reve­nue. AMD expects non-GAAP gross mar­gin to be appro­xi­mate­ly 49.5 per­cent in the fourth quar­ter 2021.

For the full year 2021, AMD now expects reve­nue to grow appro­xi­mate­ly 65 per­cent dri­ven by growth across all busi­nes­ses, up from pri­or gui­d­ance of 60 per­cent growth. AMD expects non-GAAP gross mar­gin to be appro­xi­mate­ly 48 per­cent for the full year 2021.

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 third 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
    Sep­tem­ber 25,
2021
  June 26,
2021
  Sep­tem­ber 26,
2020
GAAP gross profit   $ 2,086     $ 1,830     $ 1,230  
GAAP gross margin %   48 %   48 %   44 %
Stock-based com­pen­sa­ti­on   1     2     1  
Non-GAAP gross profit   $ 2,087     $ 1,832     $ 1,231  
Non-GAAP gross margin %   48 %   48 %   44 %
             
GAAP ope­ra­ting expenses   $ 1,141     $ 1,000     $ 781  
GAAP ope­ra­ting expenses/revenue %   26 %   26 %   28 %
Stock-based com­pen­sa­ti­on   98     81     75  
Acqui­si­ti­on-rela­ted costs   8     10      
Non-GAAP ope­ra­ting expenses   $ 1,035     $ 909     $ 706  
Non-GAAP ope­ra­ting expenses/revenue%   24 %   24 %   25 %
             
GAAP ope­ra­ting income   $ 948     $ 831     $ 449  
GAAP ope­ra­ting margin %   22 %   22 %   16 %
Stock-based com­pen­sa­ti­on   99     83     76  
Acqui­si­ti­on-rela­ted costs   8     10      
Non-GAAP ope­ra­ting income   $ 1,055     $ 924     $ 525  
Non-GAAP ope­ra­ting margin %   24 %   24 %   19 %
             

 

    Three Mon­ths Ended
    Sep­tem­ber 25,
2021
  June 26,
2021
  Sep­tem­ber 26,
2020
GAAP net inco­me / ear­nings per share   $ 923     $ 0.75     $ 710     $ 0.58     $ 390     $ 0.32  
Loss on debt redemption/conversion           1         38     0.03  
(Gains) los­ses on equi­ty invest­ments, net   (60 )   (0.05 )                
Non-cash inte­rest expen­se rela­ted to con­ver­ti­ble debt                   2      
Stock-based com­pen­sa­ti­on   99     0.08     83     0.06     76     0.06  
Equi­ty inco­me in investee   (2 )       (2 )       (1 )    
Acqui­si­ti­on-rela­ted costs   8     0.01     10     0.01          
Inco­me tax provision   (75 )   (0.06 )   (24 )   (0.02 )   (4 )    
Non-GAAP net inco­me / ear­nings per share   $ 893     $ 0.73     $ 778     $ 0.63     $ 501     $ 0.41  
                         
Shares used and net inco­me adjus­t­ment in
ear­nings per share cal­cu­la­ti­on (1)
                       
Shares used in per share cal­cu­la­ti­on (GAAP)   1,230     1,232     1,215  
Inte­rest expen­se add-back to GAAP net income   $     $     $ 1  
Shares used in per share cal­cu­la­ti­on (Non-GAAP)   1,230     1,232     1,230  
Inte­rest expen­se add-back to Non-GAAP net income   $     $     $ 1  

 

(1 )   For the three mon­ths ended Sep­tem­ber 26, 2020, GAAP dilu­t­ed EPS cal­cu­la­ti­ons inclu­de 11 mil­li­on rela­ted to the Company’s 2026 Con­ver­ti­ble Notes and the asso­cia­ted $1 mil­li­on inte­rest expen­se add-back to net inco­me under the “if con­ver­ted” method. For the three mon­ths ended Sep­tem­ber 26, 2020, 15 mil­li­on shares rela­ted to the Company’s 2026 Con­ver­ti­ble Notes were not inclu­ded in the GAAP dilu­t­ed EPS cal­cu­la­ti­ons as their inclu­si­on would have been anti-dilutive.

For the three mon­ths ended Sep­tem­ber 26, 2020, Non-GAAP dilu­t­ed EPS cal­cu­la­ti­ons inclu­de 26 mil­li­on shares rela­ted to the Company’s 2026 Con­ver­ti­ble Notes and the asso­cia­ted $1 mil­li­on inte­rest expen­se 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 the fea­tures, func­tio­n­a­li­ty, per­for­mance, avai­la­bi­li­ty, timing and expec­ted bene­fits of AMD pro­ducts; AMD’s goal to incre­a­se ener­gy effi­ci­en­cy of pro­ces­sors run­ning AI trai­ning and high per­for­mance com­pu­ting app­li­ca­ti­ons 30x by 2025; and AMD’s expec­ted fourth 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 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 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 Octo­ber 26, 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, AMD 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   Nine Mon­ths Ended  
    Sep­tem­ber 25,
2021
  June 26,
2021
  Sep­tem­ber 26,
2020
  Sep­tem­ber 25,
2021
  Sep­tem­ber 26,
2020
 
Net reve­nue   $ 4,313     $ 3,850     $ 2,801     $ 11,608     $ 6,519    
Cost of sales   2,227     2,020     1,571     6,105     3,623    
Gross pro­fit   2,086     1,830     1,230     5,503     2,896    
Gross mar­gin %   48 %   48 %   44 %   47 %   44 %  
Rese­arch and development   765     659     508     2,034     1,410    
Mar­ke­ting, gene­ral and administrative   376     341     273     1,036     687    
Licen­sing gain   (3 )   (1 )       (8 )      
Ope­ra­ting income   948     831     449     2,441     799    
Inte­rest expense   (7 )   (10 )   (11 )   (26 )   (38 )  
Other inco­me (expen­se), net   62         (37 )   51     (32 )  
Inco­me befo­re inco­me taxes and equi­ty income   1,003     821     401     2,466     729    
Inco­me tax provision   82     113     12     284     22    
Equi­ty inco­me in investee   2     2     1     6     2    
Net Inco­me   $ 923     $ 710     $ 390     $ 2,188     $ 709    
Ear­nings 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
(Mil­li­ons)
    Sep­tem­ber 25,
2021
  Decem­ber 26,
2020
    (Unau­di­ted)    
ASSETS        
Cur­rent assets:        
Cash and cash equivalents   $ 2,440     $ 1,595  
Short-term invest­ments   1,168     695  
Accounts receiva­ble, net   2,224     2,066  
Invent­ories   1,902     1,399  
Receiva­bles from rela­ted parties   5     10  
Pre­paid expen­ses and other cur­rent assets   249     378  
Total cur­rent assets   7,988     6,143  
Pro­per­ty and equip­ment, net   717     641  
Ope­ra­ting lea­se right-of use assets   284     208  
Good­will   289     289  
Invest­ment: equi­ty method   69     63  
Defer­red tax assets   1,036     1,245  
Other non-cur­rent assets   770     373  
Total Assets   $ 11,153     $ 8,962  
         
LIABILITIES AND STOCKHOLDERSEQUITY        
Cur­rent liabilities:        
Accounts paya­ble   $ 1,048     $ 468  
Paya­bles to rela­ted parties   36     78  
Accrued lia­bi­li­ties   2,048     1,796  
Short-term debt   312      
Other cur­rent liabilities   120     75  
Total cur­rent liabilities   3,564     2,417  
Long-term debt, net   1     330  
Long-term ope­ra­ting lea­se liabilities   269     201  
Other long-term liabilities   183     177  
         
Stock­hol­ders’ equity:        
Capi­tal stock:        
Com­mon stock, par value   12     12  
Addi­tio­nal paid-in capital   10,905     10,544  
Tre­a­su­ry stock, at cost   (1,356 )   (131 )
Accu­mu­la­ted defi­cit (1)   (2,425 )   (4,605 )
Accu­mu­la­ted other com­pre­hen­si­ve income       17  
Total stock­hol­ders’ equity   $ 7,136     $ 5,837  
Total Lia­bi­li­ties and Stock­hol­ders’ Equity   $ 11,153     $ 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   Nine Mon­ths Ended
    Sep­tem­ber 25,
2021
  June 26,
2021
  Sep­tem­ber 26,
2020
  Sep­tem­ber 25,
2021
  Sep­tem­ber 26,
2020
Net cash pro­vi­ded by (used in)                    
Ope­ra­ting activities   $ 849     $ 952     $ 339     $ 2,699     $ 517  
Inves­ting activities   $ (83 )   $ 119     $ (549 )   $ (686 )   $ (658 )
Finan­cing activities   $ (949 )   $ (211 )   $ (269 )   $ (1,168 )   $ (29 )

 

 

SELECTED CORPORATE DATA
(Mil­li­ons) (Unau­di­ted)
    Three Mon­ths Ended   Nine Mon­ths Ended
    Sep­tem­ber 25,
2021
  June 26,
2021
  Sep­tem­ber 26,
2020
  Sep­tem­ber 25,
2021
  Sep­tem­ber 26,
2020
Seg­ment Information                    
Com­pu­ting and Gra­phics (1)                    
Net reve­nue   $ 2,398     $ 2,250     $ 1,667     $ 6,748     $ 4,472  
Ope­ra­ting income   $ 513     $ 526     $ 384     $ 1,524     $ 846  
Enter­pri­se, Embed­ded and Semi-Cus­tom (2)                    
Net reve­nue   $ 1,915     $ 1,600     $ 1,134     $ 4,860     $ 2,047  
Ope­ra­ting income   $ 542     $ 398     $ 141     $ 1,217     $ 148  
All Other (3)                    
Net reve­nue   $     $     $     $     $  
Ope­ra­ting loss   $ (107 )   $ (93 )   $ (76 )   $ (300 )   $ (195 )
Total                    
Net reve­nue   $ 4,313     $ 3,850     $ 2,801     $ 11,608     $ 6,519  
Ope­ra­ting income   $ 948     $ 831     $ 449     $ 2,441     $ 799  
                     
                     
Other Data                    
Capi­tal expenditures   $ 85     $ 64     $ 74     $ 215     $ 220  
Adjus­ted EBITDA (4)   $ 1,152     $ 1,021     $ 607     $ 3,030     $ 1,216  
Cash, cash equi­va­lents 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 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   Nine Mon­ths Ended
    Sep­tem­ber 25,
2021
  June 26,
2021
  Sep­tem­ber 26,
2020
  Sep­tem­ber 25,
2021
  Sep­tem­ber 26,
2020
GAAP net income   $ 923     $ 710     $ 390     $ 2,188     $ 709  
Inte­rest expense   7     10     11     26     38  
Other (inco­me) expen­se, net   (62 )       37     (51 )   32  
Inco­me tax provision   82     113     12     284     22  
Equi­ty inco­me in investee   (2 )   (2 )   (1 )   (6 )   (2 )
Stock-based com­pen­sa­ti­on   99     83     76     267     195  
Depre­cia­ti­on and amortization   97     97     82     289     222  
Acqui­si­ti­on-rela­ted costs   8     10         33      
Adjus­ted EBITDA   $ 1,152     $ 1,021     $ 607     $ 3,030     $ 1,216  

 

 

(5) Recon­ci­lia­ti­on of GAAP Net Cash Pro­vi­ded by Ope­ra­ting Acti­vi­ties to Free Cash Flow**
    Three Mon­ths Ended   Nine Mon­ths Ended
    Sep­tem­ber 25,
2021
  June 26,
2021
  Sep­tem­ber 26,
2020
  Sep­tem­ber 25,
2021
  Sep­tem­ber 26,
2020
GAAP net cash pro­vi­ded by ope­ra­ting activities   $ 849     $ 952     $ 339     2,699     517  
Purcha­ses of pro­per­ty and equipment   (85 )   (64 )   (74 )   (215 )   (220 )
Free cash flow   $ 764     $ 888     $ 265     2,484     297  

 

*   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 in inves­tee, stock-based com­pen­sa­ti­on, and depre­cia­ti­on and amor­tiz­a­ti­on expen­se. The Com­pa­ny also inclu­ded acqui­si­ti­on-rela­ted cos­ts for the three mon­ths ended Sep­tem­ber 25, 2021 and June 26, 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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