AMD Reports First Quarter 2022 Financial Results

Record quar짯ter짯ly reve짯nue of $5.9 bil짯li짯on grew 71% year-over-year; Gross mar짯gin grew 2 per짯cen짯ta짯ge points and non-GAAP gross mar짯gin grew 7 per짯cen짯ta짯ge points year-over-year 

SANTA CLARA, Calif., May 03, 2022 (GLOBE NEWSWIRE)  AMD (NASDAQ:AMD) today announ짯ced reve짯nue for the first quar짯ter of 2022 of $5.9 bil짯li짯on, gross mar짯gin of 48%, ope짯ra짯ting inco짯me of $951 mil짯li짯on, ope짯ra짯ting mar짯gin of 16%, net inco짯me of $786 mil짯li짯on and diluted ear짯nings per share of $0.56. On a non-GAAP(*) basis, gross mar짯gin was 53%, ope짯ra짯ting inco짯me was $1.8 bil짯li짯on, net inco짯me was $1.6 bil짯li짯on and diluted ear짯nings per share was $1.13. First quar짯ter 2022 results include par짯ti짯al quar짯ter finan짯cial results from the recent짯ly com짯ple짯ted acqui짯si짯ti짯on of Xilinx which clo짯sed Febru짯ary 14, 2022.

Exclu짯ding Xilinx, AMD had record quar짯ter짯ly reve짯nue of $5.3 bil짯li짯on, non-GAAP gross mar짯gin of 51% and non-GAAP ope짯ra짯ting mar짯gin of 30%. 
쏷he first quar짯ter mark짯ed a signi짯fi짯cant inflec짯tion point in our jour짯ney to sca짯le and trans짯form AMD as we deli짯ver짯ed record reve짯nue and clo짯sed our stra짯te짯gic acqui짯si짯ti짯on of Xilinx, said AMD Chair and CEO Dr. Lisa Su. 쏣ach of our busi짯nesses grew by a signi짯fi짯cant dou짯ble digit per짯cen짯ta짯ge year-over-year, led by EPYC ser짯ver pro짯ces짯sor reve짯nue more than doubling for the third straight quar짯ter. Demand remains strong for our lea짯der짯ship pro짯ducts, with our increased full-year gui짯dance reflec짯ting hig짯her AMD orga짯nic growth and the addi짯ti짯on of the gro짯wing Xilinx business.

GAAP Quar짯ter짯ly Finan짯cial Results

  Q1 2022 Q1 2021 Y/Y Q4 2021 Q/Q
Reve짯nue ($M) $5,887 $3,445 Up 71% $4,826 Up 22%
Gross pro짯fit ($M) $2,818 $1,587 Up 78% $2,426 Up 16%
Gross mar짯gin % 48% 46% Up 190 bps 50% Down 240 bps
Ope짯ra짯ting expen짯ses ($M) $1,950 $929 Up 110% $1,223 Up 59%
Ope짯ra짯ting inco짯me ($M) $951 $662 Up 44% $1,207 Down 21%
Ope짯ra짯ting margin % 16% 19% Down 3pp 25% Down 9pp
Net inco짯me ($M) $786 $555 Up 42% $974 Down 19%
Ear짯nings per share $0.56 $0.45 Up 24% $0.80 Down 30%

 

Non-GAAP(*) Quar짯ter짯ly Finan짯cial Results

  Q1 2022 Q1 2021 Y/Y Q4 2021 Q/Q
Reve짯nue ($M) $5,887 $3,445 Up 71% $4,826 Up 22%
Gross pro짯fit ($M) $3,100 $1,588 Up 95% $2,427 Up 28%
Gross mar짯gin % 53% 46% Up 660 bps 50% Up 240 bps
Ope짯ra짯ting expen짯ses ($M) $1,346 $830 Up 62% $1,103 Up 22%
Ope짯ra짯ting inco짯me ($M) $1,837 $762 Up 141% $1,328 Up 38%
Ope짯ra짯ting margin % 31% 22% Up 9pp 27% Up 4pp
Net inco짯me ($M) $1,589 $642 Up 148% $1,122 Up 42%
Ear짯nings per share $1.13 $0.52 Up 117% $0.92 Up 23%

 

Non-GAAP(*) Quar짯ter짯ly Finan짯cial Results (Exclu짯ding Xilinx)

  Q1 2022 Q1 2021 Y/Y Q4 2021 Q/Q
Reve짯nue ($M) $5,328 $3,445 Up 55% $4,826 Up 10%
Gross pro짯fit ($M) $2,712 $1,588 Up 71% $2,427 Up 12%
Gross mar짯gin % 51% 46% Up 480 bps 50% Up 60 bps
Ope짯ra짯ting inco짯me ($M) $1,604 $762 Up 110% $1,328 Up 21%
Ope짯ra짯ting margin % 30% 22% Up 8pp 27% Up 3pp

 

Q1 2022 Results

  • Reve짯nue of $5.9 bil짯li짯on was up 71% year-over-year and 22% quar짯ter-over-quar짯ter dri짯ven by hig짯her reve짯nue in the Com짯pu짯ting and Gra짯phics and Enter짯pri짯se, Embedded and Semi-Cus짯tom seg짯ments and the inclu짯si짯on of Xilinx revenue.
  • Gross mar짯gin was 48%, an increase of 2 per짯cen짯ta짯ge points year-over-year and a decrease of 2 per짯cen짯ta짯ge points quar짯ter-over-quar짯ter. The year-over-year increase was pri짯ma짯ri짯ly dri짯ven by hig짯her ser짯ver pro짯ces짯sor reve짯nue and high mar짯gin Xilinx reve짯nue, par짯ti짯al짯ly off짯set by amor짯tiza짯ti짯on of intan짯gi짯ble assets and acqui짯si짯ti짯on-rela짯ted cos짯ts. The quar짯ter-over-quar짯ter decrease was pri짯ma짯ri짯ly due to amor짯tiza짯ti짯on of intan짯gi짯ble assets and acqui짯si짯ti짯on-rela짯ted costs.
  • Non-GAAP gross mar짯gin was 53%, an increase of 7 per짯cen짯ta짯ge points year-over-year and 3 per짯cen짯ta짯ge points quar짯ter-over-quar짯ter. The year-over-year increase was pri짯ma짯ri짯ly dri짯ven by hig짯her ser짯ver pro짯ces짯sor reve짯nue and high mar짯gin Xilinx reve짯nue. The quar짯ter-over-quar짯ter increase was pri짯ma짯ri짯ly dri짯ven by high mar짯gin Xilinx reve짯nue, hig짯her ser짯ver pro짯ces짯sor reve짯nue and richer cli짯ent pro짯duct mix. 
  • Ope짯ra짯ting inco짯me was $951 mil짯li짯on com짯pared to $662 mil짯li짯on a year ago and $1.2 bil짯li짯on in the pri짯or quar짯ter. The year-over-year increase was pri짯ma짯ri짯ly dri짯ven by hig짯her reve짯nue and gross pro짯fit, par짯ti짯al짯ly off짯set by amor짯tiza짯ti짯on of intan짯gi짯ble assets and acqui짯si짯ti짯on-rela짯ted cos짯ts. The quar짯ter-over-quar짯ter decrease was pri짯ma짯ri짯ly due to amor짯tiza짯ti짯on of intan짯gi짯ble assets and acqui짯si짯ti짯on-rela짯ted costs.
  • Record non-GAAP ope짯ra짯ting inco짯me was $1.8 bil짯li짯on com짯pared to $762 mil짯li짯on a year ago and $1.3 bil짯li짯on in the pri짯or quar짯ter. The year-over-year and quar짯ter-over-quar짯ter increa짯ses were pri짯ma짯ri짯ly dri짯ven by hig짯her gross profit.
  • Net inco짯me was $786 mil짯li짯on com짯pared to $555 mil짯li짯on a year ago and $974 mil짯li짯on in the pri짯or quar짯ter. The year-over-year increase was pri짯ma짯ri짯ly dri짯ven by hig짯her ope짯ra짯ting inco짯me. The quar짯ter-over-quar짯ter decrease was pri짯ma짯ri짯ly due to lower ope짯ra짯ting inco짯me rela짯ted to amor짯tiza짯ti짯on of intan짯gi짯ble assets and acqui짯si짯ti짯on-rela짯ted costs.
  • Record non-GAAP net inco짯me was $1.6 bil짯li짯on com짯pared to $642 mil짯li짯on a year ago and $1.1 bil짯li짯on in the pri짯or quar짯ter. The year-over-year and quar짯ter-over-quar짯ter increa짯ses were pri짯ma짯ri짯ly dri짯ven by hig짯her ope짯ra짯ting income.
  • Diluted ear짯nings per share was $0.56 com짯pared to $0.45 a year ago and $0.80 in the pri짯or quar짯ter. Record non-GAAP diluted ear짯nings per share was $1.13 com짯pared to $0.52 a year ago and $0.92 in the pri짯or quarter.
  • Cash, cash equi짯va짯lents and short-term invest짯ments were $6.5 bil짯li짯on at the end of the quar짯ter. The com짯pa짯ny repurcha짯sed $1.9 bil짯li짯on of com짯mon stock during the quarter.
  • Record cash from ope짯ra짯ti짯ons was $995 mil짯li짯on in the quar짯ter com짯pared to $898 mil짯li짯on a year ago and $822 mil짯li짯on in the pri짯or quar짯ter. Record free cash flow was $924 mil짯li짯on in the quar짯ter com짯pared to $832 mil짯li짯on a year ago and $736 mil짯li짯on in the pri짯or quarter.
  • AMD셲 balan짯ce sheet reflects $49.6 bil짯li짯on of good짯will and acqui짯si짯ti짯on-rela짯ted intan짯gi짯ble assets asso짯cia짯ted with the acqui짯si짯ti짯on of Xilinx.

Quar짯ter짯ly Finan짯cial Seg짯ment Summary

  • Record Com짯pu짯ting and Gra짯phics seg짯ment reve짯nue was $2.8 bil짯li짯on, up 33% year-over-year and 8% quar짯ter-over-quar짯ter. The year-over-year increase was dri짯ven by Ryzen꽓 and Rade짯on꽓 pro짯ces짯sor sales. The quar짯ter-over-quar짯ter increase was dri짯ven by Ryzen꽓 pro짯ces짯sor sales. 
    • Cli짯ent pro짯ces짯sor avera짯ge sel짯ling pri짯ce (ASP) increased year-over-year and quar짯ter-over-quar짯ter dri짯ven by a richer mix of Ryzen pro짯ces짯sor sales.
    • GPU ASP increased year-over-year dri짯ven by high end Rade짯on pro짯ces짯sor sales and decreased quar짯ter-over-quar짯ter due to a lower mix of data cen짯ter GPU revenue.
    • Record ope짯ra짯ting inco짯me was $723 mil짯li짯on com짯pared to $485 mil짯li짯on a year ago and $566 mil짯li짯on in the pri짯or quar짯ter. Ope짯ra짯ting inco짯me impro짯ve짯ments were pri짯ma짯ri짯ly dri짯ven by hig짯her reve짯nue, par짯ti짯al짯ly off짯set by hig짯her ope짯ra짯ting expenses.
  • Record Enter짯pri짯se, Embedded and Semi-Cus짯tom seg짯ment reve짯nue was $2.5 bil짯li짯on, up 88% year-over-year and 13% quar짯ter-over-quar짯ter dri짯ven by hig짯her EPYC꽓 pro짯ces짯sor reve짯nue, semi-cus짯tom and embedded pro짯duct sales. 
    • Record ope짯ra짯ting inco짯me was $881 mil짯li짯on com짯pared to $277 mil짯li짯on a year ago and $762 mil짯li짯on in the pri짯or quar짯ter. Ope짯ra짯ting inco짯me impro짯ve짯ments were pri짯ma짯ri짯ly dri짯ven by hig짯her reve짯nue and an $83 mil짯li짯on licen짯sing gain.
  • Xilinx par짯ti짯al quar짯ter reve짯nue was $559 mil짯li짯on with ope짯ra짯ting inco짯me of $233 mil짯li짯on. On a pro-for짯ma basis for the full quar짯ter, Xilinx gene짯ra짯ted over $1 bil짯li짯on of reve짯nue, up 22% year-over-year, dri짯ven by growth across all Xilinx major end mar짯ket categories.
  • All Other ope짯ra짯ting loss was $886 mil짯li짯on as com짯pared to ope짯ra짯ting los짯ses of $100 mil짯li짯on a year ago and $121 mil짯li짯on in the pri짯or quar짯ter. Hig짯her ope짯ra짯ting loss was pri짯ma짯ri짯ly due to amor짯tiza짯ti짯on of intan짯gi짯ble assets and acqui짯si짯ti짯on-rela짯ted costs.

Recent PR Highlights

  • AMD com짯ple짯ted the lar짯gest acqui짯si짯ti짯on in the histo짯ry of the semi짯con짯duc짯tor indus짯try by acqui짯ring Xilinx to crea짯te the industry셲 high-per짯for짯mance and adap짯ti짯ve com짯pu짯ting lea짯der with signi짯fi짯cant짯ly expan짯ded sca짯le and the stron짯gest port짯fo짯lio of lea짯der짯ship com짯pu짯ting, gra짯phics and adap짯ti짯ve SoC products.
  • AMD announ짯ced a defi짯ni짯ti짯ve agree짯ment to acqui짯re Pen짯san짯do for appro짯xi짯m짯ate짯ly $1.9 bil짯li짯on befo짯re working capi짯tal and other adjus짯t짯ments. Pensando셲 dis짯tri짯bu짯ted ser짯vices plat짯form will expand AMD셲 data cen짯ter pro짯duct port짯fo짯lio with a high-per짯for짯mance data cen짯ter pro짯ces짯sing unit (DPU) and soft짯ware stack that are alre짯a짯dy deploy짯ed at sca짯le across cloud and enter짯pri짯se cus짯to짯mers inclu짯ding Gold짯man Sachs, IBM Cloud, Micro짯soft Azu짯re and Ora짯cle Cloud.
  • AMD announ짯ced the gene짯ral avai짯la짯bi짯li짯ty of 3rd Gen AMD EPYC pro짯ces짯sors with AMD 3D V멌ache꽓 tech짯no짯lo짯gy, deli짯ve짯ring lea짯der짯ship per짯for짯mance in tech짯ni짯cal com짯pu짯ting workloads, the industry셲 lar짯gest L3 cache and modern secu짯ri짯ty features.
  • Cloud cus짯to짯mers con짯tin짯ued to expand their AMD EPYC pro짯ces짯sor-powered offe짯rings, with 465 cloud ins짯tances now deli짯ve짯ring powerful per짯for짯mance for today셲 most important workloads. 
  • AMD expan짯ded its lin짯e짯up of high-per짯for짯mance AMD Ryzen desk짯top pro짯ces짯sors for gamers and creators. 
    • AMD announ짯ced the Ryzen 7 5800X3D pro짯ces짯sor, the first Ryzen pro짯ces짯sor to fea짯ture AMD 3D V멌ache tech짯no짯lo짯gy and the industry셲 first x86 PC pro짯ces짯sor with 3D sta짯cked chip짯lets. The Ryzen 7 5800X3D pro짯ces짯sor deli짯vers lea짯der짯ship gam짯ing per짯for짯mance in sel짯ect titles com짯pared to the com짯pe짯ti짯ti짯ve pro짯ces짯sor wit짯hout sta짯cked cache technology.
    • Leno짯vo expan짯ded its line of Think짯Sta짯ti짯on P620 work짯sta짯tions with the new Ryzen Thre짯ad짯rip짯per꽓 PRO 5000 WX-Series pro짯ces짯sors, which bring domi짯nant, full-spec짯trum per짯for짯mance lea짯der짯ship for the most deman짯ding pro짯fes짯sio짯nal workloads.
    • AMD also expan짯ded the Ryzen desk짯top pro짯ces짯sor port짯fo짯lio with six new 쏾en 3 and 쏾en 2 pro짯ces짯sors, giving PC enthu짯si짯asts even more opti짯ons to crea짯te a cus짯to짯mi짯zed gam짯ing experience.
  • AMD expan짯ded the Ver짯sal pro짯duct lin짯e짯up with first cus짯to짯mer ship짯ments of the flag짯ship Ver짯sal HBM adap짯ti짯ve SoC with inte짯gra짯ted HBM2e memo짯ry and Ver짯sal Pre짯mi짯um pro짯duct series with AI Engi짯nes opti짯mi짯zed for signal pro짯ces짯sing-inten짯si짯ve appli짯ca짯ti짯ons like next-gene짯ra짯ti짯on radar and wire짯less sys짯tem and device testing.
  • AMD announ짯ced that its board of direc짯tors appro짯ved a new $8 bil짯li짯on share repurcha짯se pro짯gram. This pro짯gram is in addi짯ti짯on to the $4 bil짯li짯on share repurcha짯se pro짯gram announ짯ced last year.
  • AMD ente짯red into a $3 bil짯li짯on sus짯taina짯bi짯li짯ty-lin짯ked cre짯dit faci짯li짯ty to replace its exis짯ting $500 mil짯li짯on revol짯ving cre짯dit faci짯li짯ty and rein짯forces com짯mit짯ment to the company셲 envi짯ron짯men짯tal, social and gover짯nan짯ce (ESG) goals.
  • AMD announ짯ced that its board of direc짯tors elec짯ted Pre짯si짯dent and CEO Dr. Lisa Su as the chair of the board and John E. Cald짯well as lead inde짯pen짯dent direc짯tor. For짯mer Xilinx board mem짯bers Jon Olson and Eliza짯beth Van짯ders짯li짯ce also joi짯n짯ed the AMD board in con짯junc짯tion with the acqui짯si짯ti짯on of Xilinx.

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 second quar짯ter of 2022, AMD expects reve짯nue to be appro짯xi짯m짯ate짯ly $6.5 bil짯li짯on, plus or minus $200 mil짯li짯on, an increase of appro짯xi짯m짯ate짯ly 69% year-over-year and appro짯xi짯m짯ate짯ly 10% quar짯ter-over-quar짯ter. The year-over-year increase is expec짯ted to be dri짯ven by the addi짯ti짯on of Xilinx and hig짯her ser짯ver, semi-cus짯tom and cli짯ent reve짯nue. The quar짯ter-over-quar짯ter increase is expec짯ted to be pri짯ma짯ri짯ly dri짯ven by Xilinx and hig짯her ser짯ver reve짯nue. AMD expects non-GAAP gross mar짯gin to be appro짯xi짯m짯ate짯ly 54% in the second quar짯ter of 2022.

For the full year 2022, AMD now expects reve짯nue to be appro짯xi짯m짯ate짯ly $26.3 bil짯li짯on, an increase of appro짯xi짯m짯ate짯ly 60% over 2021, up from pri짯or gui짯dance of appro짯xi짯m짯ate짯ly 31%, dri짯ven by the addi짯ti짯on of Xilinx and hig짯her ser짯ver and semi-cus짯tom reve짯nue. AMD expects non-GAAP gross mar짯gin to be appro짯xi짯m짯ate짯ly 54% for 2022, up from pri짯or gui짯dance of appro짯xi짯m짯ate짯ly 51%.

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 first quar짯ter 2022 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
    March 26,
2022
  Decem짯ber 25,
2021
  March 27,
2021
GAAP gross profit   $ 2,818     $ 2,426     $ 1,587  
GAAP gross margin %     48 %     50 %     46 %
Stock-based com짯pen짯sa짯ti짯on     4       1       1  
Acqui짯si짯ti짯on-rela짯ted cos짯ts (1)     92              
Amor짯tiza짯ti짯on of acqui짯red intan짯gi짯ble assets     186              
Non-GAAP gross profit   $ 3,100     $ 2,427     $ 1,588  
Non-GAAP gross margin %     53 %     50 %     46 %
             
GAAP ope짯ra짯ting expenses   $ 1,950     $ 1,223     $ 929  
GAAP ope짯ra짯ting expenses/revenue %     33 %     25 %     27 %
Stock-based com짯pen짯sa짯ti짯on     170       111       84  
Acqui짯si짯ti짯on-rela짯ted cos짯ts (1)     141       9       15  
Amor짯tiza짯ti짯on of acqui짯red intan짯gi짯ble assets     293              
Non-GAAP ope짯ra짯ting expenses   $ 1,346     $ 1,103     $ 830  
Non-GAAP ope짯ra짯ting expenses/revenue %     23 %     23 %     24 %
             
GAAP ope짯ra짯ting income   $ 951     $ 1,207     $ 662  
GAAP ope짯ra짯ting margin %     16 %     25 %     19 %
Stock-based com짯pen짯sa짯ti짯on     174       112       85  
Acqui짯si짯ti짯on-rela짯ted cos짯ts (1)     233       9       15  
Amor짯tiza짯ti짯on of acqui짯red intan짯gi짯ble assets     479              
Non-GAAP ope짯ra짯ting income   $ 1,837     $ 1,328     $ 762  
Non-GAAP ope짯ra짯ting margin %     31 %     27 %     22 %

 

    Three Months Ended
    March 26,
2022
  Decem짯ber 25,
2021
  March 27,
2021
GAAP net inco짯me / ear짯nings per share   $ 786     $ 0.56     $ 974     $ 0.80   $ 555     $ 0.45  
Loss on debt redemption/conversion                           6       0.01  
(Gains) los짯ses on equi짯ty invest짯ments, net     44       0.03       (4 )         8       0.01  
Stock-based com짯pen짯sa짯ti짯on     174       0.12       112       0.09     85       0.07  
Equi짯ty inco짯me in investee     (3 )                     (2 )      
Acqui짯si짯ti짯on-rela짯ted cos짯ts (1)     233       0.17       9           15       0.01  
Amor짯tiza짯ti짯on of acqui짯red intan짯gi짯ble assets     479       0.34                        
Inco짯me tax provision     (124 )     (0.09 )     31       0.03     (25 )     (0.03 )
Non-GAAP net inco짯me / ear짯nings per share   $ 1,589     $ 1.13     $ 1,122     $ 0.92   $ 642     $ 0.52  
                         

 

(1 )   Acqui짯si짯ti짯on-rela짯ted cos짯ts pri짯ma짯ri짯ly com짯pri짯sed of tran짯sac짯tion cos짯ts, purcha짯se pri짯ce adjus짯t짯ments for inven짯to짯ry and cer짯tain com짯pen짯sa짯ti짯on charges

 

RECONCILIATION OF AMD GAAP TO AMD NON-GAAP EXCLUDING XILINX
(in mil짯li짯ons) (Unau짯di짯ted)

  Three Months Ended March 26, 2022
  Reve짯nue   Gross
Pro짯fit
Gross
Mar짯gin %
  Ope짯ra짯ting
Inco짯me
Ope짯ra짯ting
Mar짯gin %
AMD GAAP $         5,887           $         2,818         48%   $         951         16%
Stock-based com짯pen짯sa짯ti짯on                                4                174   
Acqui짯si짯ti짯on-rela짯ted cos짯ts (1)                                92                233   
Amor짯tiza짯ti짯on of acqui짯red intan짯gi짯ble assets                                186                479   
AMD Non-GAAP           5,887                     3,100         53%             1,837         31%
Xilinx seg짯ment           559              388                233   
AMD Non-GAAP Exclu짯ding Xilinx $         5,328           $         2,712         51%   $         1,604         30%

 

        (1 )   Acqui짯si짯ti짯on-rela짯ted cos짯ts pri짯ma짯ri짯ly com짯pri짯sed of tran짯sac짯tion cos짯ts, purcha짯se pri짯ce adjus짯t짯ments for inven짯to짯ry and cer짯tain com짯pen짯sa짯ti짯on charges

 

RECONCILIATION OF XILINX SEGMENT REVENUE TO XILINX PRO FORMA REVENUE
(in mil짯li짯ons) (Unau짯di짯ted)

  Three Months Ended
March 26, 2022
  Reve짯nue
Xilinx Seg짯ment (1) $ 559
Xilinx Pre-Acqui짯si짯ti짯on (2)   477
Xilinx Pro For짯ma (3) $ 1,036

 

        (1 )   Repres짯ents unau짯di짯ted Xilinx reve짯nue from the date of acqui짯si짯ti짯on, Febru짯ary 14, 2022, through March 26, 2022
        (2 )   Repres짯ents unau짯di짯ted Xilinx reve짯nue from Janu짯ary 2, 2022 to Febru짯ary 13, 2022
        (3 )   The unau짯di짯ted Xilinx pro for짯ma reve짯nue repres짯ents the three-month peri짯od begin짯ning Janu짯ary 2, 2022 through March 26, 2022. The pro for짯ma reve짯nue is pre짯sen짯ted for infor짯ma짯tio짯nal pur짯po짯ses only.
       

About AMD
For more than 50 years AMD has dri짯ven inno짯va짯ti짯on in high-per짯for짯mance com짯pu짯ting, gra짯phics and visua짯liza짯ti짯on tech짯no짯lo짯gies. AMD employees are focu짯sed on buil짯ding lea짯der짯ship high-per짯for짯mance and adap짯ti짯ve pro짯ducts that push the boun짯da짯ries of what is pos짯si짯ble. Bil짯li짯ons of peo짯p짯le, lea짯ding For짯tu짯ne 500 busi짯nesses and cut짯ting-edge sci짯en짯ti짯fic rese짯arch insti짯tu짯ti짯ons around the world rely on AMD tech짯no짯lo짯gy dai짯ly to impro짯ve how they live, work and play. For more infor짯ma짯ti짯on about how AMD is enab짯ling today and inspi짯ring tomor짯row, visit the AMD (NASDAQ: AMDweb짯siteblogFace짯book and Twit짯ter pages.

Cau짯tio짯na짯ry Statement
This press release con짯ta짯ins for짯ward-loo짯king state짯ments con짯cer짯ning Advan짯ced Micro Devices, Inc. (AMD) such as AMD셲 expec짯ta짯ti짯ons regar짯ding demand for its pro짯ducts, AMD orga짯nic growth and Xilinx busi짯ness growth; the fea짯tures, func짯tion짯a짯li짯ty, per짯for짯mance, avai짯la짯bi짯li짯ty, timing and expec짯ted bene짯fits of AMD pro짯ducts; AMD셲 plan짯ned acqui짯si짯ti짯on of Pen짯san짯do Sys짯tems Inc. and the anti짯ci짯pa짯ted bene짯fits from the acqui짯si짯ti짯on; AMD셲 expec짯ted second quar짯ter 2022 and fis짯cal 2022 finan짯cial out짯look, inclu짯ding reve짯nue and non-GAAP gross mar짯gin and expec짯ted dri짯vers based on cur짯rent expec짯ta짯ti짯ons; and expec짯ted growth in 2022, which are made pur짯su짯ant to the Safe Har짯bor pro짯vi짯si짯ons of the Pri짯va짯te Secu짯ri짯ties Liti짯ga짯ti짯on Reform Act of 1995. For짯ward-loo짯king state짯ments are com짯mon짯ly iden짯ti짯fied by words such as 쐗ould, 쐌ay, 쐃xpects, 쐀elie짯ves, 쐏lans, 쐇ntends, 쐏ro짯jects and other terms with simi짯lar mea짯ning. Inves짯tors are cau짯tio짯ned that the for짯ward-loo짯king state짯ments in this press release are based on cur짯rent beliefs, assump짯ti짯ons and expec짯ta짯ti짯ons, speak only as of the date of this press release and invol짯ve risks and uncer짯tain짯ties that could cau짯se actu짯al results to dif짯fer mate짯ri짯al짯ly from cur짯rent expec짯ta짯ti짯ons. Such state짯ments are sub짯ject to cer짯tain known and unknown risks and uncer짯tain짯ties, many of which are dif짯fi짯cult to pre짯dict and gene짯ral짯ly bey짯ond AMD셲 con짯trol, that could cau짯se actu짯al results and other future events to dif짯fer mate짯ri짯al짯ly from tho짯se expres짯sed in, or impli짯ed or pro짯jec짯ted by, the for짯ward-loo짯king infor짯ma짯ti짯on and state짯ments. Mate짯ri짯al fac짯tors that could cau짯se actu짯al results to dif짯fer mate짯ri짯al짯ly from cur짯rent expec짯ta짯ti짯ons include, wit짯hout limi짯ta짯ti짯on, the fol짯lo짯wing: Intel Corporation셲 domi짯nan짯ce of the micro짯pro짯ces짯sor mar짯ket and its aggres짯si짯ve busi짯ness prac짯ti짯ces; glo짯bal eco짯no짯mic uncer짯tain짯ty; loss of a signi짯fi짯cant cus짯to짯mer; impact of the COVID-19 pan짯de짯mic on AMD셲 busi짯ness, finan짯cial con짯di짯ti짯on and results of ope짯ra짯ti짯ons; com짯pe짯ti짯ti짯ve mar짯kets in which AMD셲 pro짯ducts are sold; mar짯ket con짯di짯ti짯ons of the indus짯tries in which AMD pro짯ducts are sold; cycli짯cal natu짯re of the semi짯con짯duc짯tor indus짯try; quar짯ter짯ly and sea짯so짯nal sales pat짯terns; AMD셲 abili짯ty to ade짯qua짯te짯ly pro짯tect its tech짯no짯lo짯gy or other intellec짯tu짯al pro짯per짯ty; unfa짯vorable cur짯ren짯cy exch짯an짯ge rate fluc짯tua짯tions; abili짯ty of third par짯ty manu짯fac짯tu짯r짯ers to manu짯fac짯tu짯re AMD셲 pro짯ducts on a time짯ly basis in suf짯fi짯ci짯ent quan짯ti짯ties and using com짯pe짯ti짯ti짯ve tech짯no짯lo짯gies; avai짯la짯bi짯li짯ty of essen짯ti짯al equip짯ment, mate짯ri짯als, sub짯stra짯tes or manu짯fac짯tu짯ring pro짯ces짯ses; abili짯ty to achie짯ve expec짯ted manu짯fac짯tu짯ring yields for AMD셲 pro짯ducts; AMD셲 abili짯ty to intro짯du짯ce pro짯ducts on a time짯ly basis with expec짯ted fea짯tures and per짯for짯mance levels; AMD셲 abili짯ty to gene짯ra짯te reve짯nue from its semi-cus짯tom SoC pro짯ducts; poten짯ti짯al secu짯ri짯ty vul짯nerabi짯li짯ties; poten짯ti짯al secu짯ri짯ty inci짯dents inclu짯ding 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 design, manu짯fac짯tu짯re and sup짯p짯ly of mother짯boards, soft짯ware and other com짯pu짯ter plat짯form com짯pon짯ents; AMD셲 reli짯ance on Micro짯soft 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; 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; effi짯ci짯en짯cy of AMD셲 sup짯p짯ly chain; AMD셲 abili짯ty to rely on third par짯ty sup짯p짯ly-chain logi짯stics func짯tions; AMD셲 abili짯ty to effec짯tively con짯trol sales of its pro짯ducts on the gray mar짯ket; 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; impact of envi짯ron짯men짯tal laws, con짯flict mine짯rals-rela짯ted pro짯vi짯si짯ons and other laws or regu짯la짯ti짯ons; impact of acqui짯si짯ti짯ons, joint ven짯tures and/or invest짯ments on AMD셲 busi짯ness, and abili짯ty of AMD to inte짯gra짯te acqui짯red busi짯nesses, such as Xilinx; impact of any impair짯ment of the com짯bi짯ned company셲 assets on the com짯bi짯ned company셲 finan짯cial posi짯ti짯on and results of ope짯ra짯ti짯on; rest짯ric짯tions impo짯sed by agree짯ments gover짯ning AMD셲 notes, the gua짯ran짯tees of Xilinx셲 notes and the revol짯ving cre짯dit faci짯li짯ty; AMD셲 indeb짯ted짯ness; AMD셲 abili짯ty to gene짯ra짯te suf짯fi짯ci짯ent cash to meet its working capi짯tal requi짯re짯ments or gene짯ra짯te suf짯fi짯ci짯ent reve짯nue and ope짯ra짯ting cash flow to make all of its plan짯ned R&D or 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, 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 2022, AMD uses a pro짯jec짯ted non-GAAP tax rate of 13%, 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. In addi짯ti짯on, AMD pro짯vi짯ded non-GAAP finan짯cial mea짯su짯res exclu짯ding Xilinx, inclu짯ding reve짯nue, gross pro짯fit and ope짯ra짯ting inco짯me, and Xilinx pro for짯ma reve짯nue for the three months ended March 26, 2022 as sup짯ple짯men짯tal infor짯ma짯ti짯on. 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 May 3, 2022 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, Thre짯ad짯rip짯per, Ver짯sal 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  
    March 26,
2022
  Decem짯ber 25,
2021
  March 27,
2021
 
Net reve짯nue   $ 5,887     $ 4,826     $ 3,445    
Cost of sales     2,883       2,400       1,858    
Amor짯tiza짯ti짯on of acqui짯si짯ti짯on-rela짯ted intangibles     186                
Total cost of sales     3,069       2,400       1,858    
Gross pro짯fit     2,818       2,426       1,587    
Gross mar짯gin %     48 %     50 %     46 %  
Rese짯arch and development     1,060       811       610    
Mar짯ke짯ting, gene짯ral and administrative     597       412       319    
Amor짯tiza짯ti짯on of acqui짯si짯ti짯on-rela짯ted intangibles     293                
Licen짯sing gain     (83 )     (4 )     (4 )  
Ope짯ra짯ting income     951       1,207       662    
Inte짯rest expense     (13 )     (8 )     (9 )  
Other inco짯me (expen짯se), net     (42 )     4       (11 )  
Inco짯me befo짯re inco짯me taxes and equi짯ty income     896       1,203       642    
Inco짯me tax provision     113       229       89    
Equi짯ty inco짯me in investee     3             2    
Net inco짯me   $ 786     $ 974     $ 555    
Ear짯nings per share              
Basic   $ 0.56     $ 0.81     $ 0.46    
Diluted   $ 0.56     $ 0.80     $ 0.45    
Shares used in per share calculation              
Basic     1,393       1,208       1,213    
Diluted     1,410       1,222       1,231    


ADVANCED MICRO DEVICES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS
(Mil짯li짯ons)

    March 26,
2022
  Decem짯ber 25,
2021
    (Unau짯di짯ted)    
ASSETS        
Cur짯rent assets:        
Cash and cash equivalents   $ 4,740     $ 2,535  
Short-term invest짯ments     1,792       1,073  
Accounts receiva짯ble, net     3,677       2,706  
Invent짯ories     2,431       1,955  
Receiv짯a짯bles from rela짯ted parties     4       2  
Pre짯paid expen짯ses and other cur짯rent assets     725       312  
Total cur짯rent assets     13,369       8,583  
Pro짯per짯ty and equip짯ment, net     1,406       702  
Ope짯ra짯ting lea짯se right-of use assets     416       367  
Good짯will     23,083       289  
Acqui짯si짯ti짯on-rela짯ted intan짯gi짯bles, net     26,832        
Invest짯ment: equi짯ty method     72       69  
Defer짯red tax assets     32       931  
Other non-cur짯rent assets     1,705       1,478  
Total Assets   $ 66,915     $ 12,419  
         
LIABILITIES AND STOCKHOLDERS EQUITY        
Cur짯rent liabilities:        
Accounts paya짯ble   $ 1,476     $ 1,321  
Paya짯bles to rela짯ted parties     205       85  
Accrued lia짯bi짯li짯ties     3,070       2,424  
Short-term debt     312       312  
Other cur짯rent liabilities     518       98  
Total cur짯rent liabilities     5,581       4,240  
Long-term debt, net     1,475       1  
Long-term ope짯ra짯ting lea짯se liabilities     370       348  
Defer짯red tax liabilities     3,109        
Other long-term liabilities     1,047       333  
         
Stock짯hol짯ders equity:        
Capi짯tal stock:        
Com짯mon stock, par value     16       12  
Addi짯tio짯nal paid-in capital     56,925       11,069  
Tre짯asu짯ry stock, at cost     (941 )     (2,130 )
Accu짯mu짯la짯ted defi짯cit (1)     (665 )     (1,451 )
Accu짯mu짯la짯ted other com짯pre짯hen짯si짯ve income     (2 )     (3 )
Total stock짯hol짯ders equity   $ 55,333     $ 7,497  
Total Lia짯bi짯li짯ties and Stock짯hol짯ders Equity   $ 66,915     $ 12,419  

 

(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  
    March 26,
2022
  Decem짯ber 25,
2021
  March 27,
2021
 
Net cash pro짯vi짯ded by (used in)              
Ope짯ra짯ting activities   $ 995     $ 822     $ 898    
Inves짯t짯ing activities   $ 3,158     $     $ (722 )  
Finan짯cing activities   $ (1,948 )   $ (727 )   $ (8 )  


SELECTED CORPORATE DATA
(Mil짯li짯ons) (Unau짯di짯ted)

    Three Months Ended  
    March 26,
2022
  Decem짯ber 25,
2021
  March 27,
2021
 
Seg짯ment and Cate짯go짯ry Infor짯ma짯ti짯on (1)              
Com짯pu짯ting and Graphics              
Net reve짯nue   $ 2,802     $ 2,584     $ 2,100    
Ope짯ra짯ting income   $ 723     $ 566     $ 485    
Enter짯pri짯se, Embedded and Semi-Custom              
Net reve짯nue   $ 2,526     $ 2,242     $ 1,345    
Ope짯ra짯ting income   $ 881     $ 762     $ 277    
Xilinx              
Net reve짯nue   $ 559     $     $    
Ope짯ra짯ting income   $ 233     $     $    
All Other              
Net reve짯nue   $     $     $    
Ope짯ra짯ting loss   $ (886 )   $ (121 )   $ (100 )  
Total              
Net reve짯nue   $ 5,887     $ 4,826     $ 3,445    
Ope짯ra짯ting income   $ 951     $ 1,207     $ 662    
               
               
Other Data              
Capi짯tal expenditures   $ 71     $ 86     $ 66    
Adjus짯ted EBITDA (2)   $ 1,967     $ 1,446     $ 857    
Cash, cash equi짯va짯lents and short-term investments   $ 6,532     $ 3,608     $ 3,116    
Free cash flow (3)   $ 924     $ 736     $ 832    
Total assets   $ 66,915     $ 12,419     $ 10,047    
Total debt   $ 1,787     $ 313     $ 313    

 

(1)     The Com짯pu짯ting and Gra짯phics seg짯ment pri짯ma짯ri짯ly includes desk짯top and note짯book pro짯ces짯sors and chip짯sets, dis짯crete and inte짯gra짯ted gra짯phics pro짯ces짯sing units (GPUs), data cen짯ter and pro짯fes짯sio짯nal GPUs and deve짯lo짯p짯ment services.
       
    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 consoles.
     
    The Xilinx seg짯ment pri짯ma짯ri짯ly includes Field Pro짯gramma짯ble Gate Arrays (FPGAs), adap짯ti짯ve Sys짯tem-on-Chips (SoCs), and Adap짯ti짯ve Com짯pu짯te Acce짯le짯ra짯ti짯on Plat짯form (ACAP) products.
     
    From time to time, the Com짯pa짯ny may also sell or licen짯se por짯ti짯ons of its IP portfolio.
     
    All Other cate짯go짯ry pri짯ma짯ri짯ly includes cer짯tain expen짯ses and cre짯dits that are not allo짯ca짯ted to any of the ope짯ra짯ting seg짯ments. Also included in this cate짯go짯ry are acqui짯si짯ti짯on-rela짯ted intan짯gi짯ble asset amor짯tiza짯ti짯on expen짯se, stock-based com짯pen짯sa짯ti짯on expen짯se and acqui짯si짯ti짯on-rela짯ted costs.
(2)     Recon짯ci짯lia짯ti짯on of GAAP Net Inco짯me to Adjus짯ted EBITDA

 

    Three Months Ended  
    March 26,
2022
  Decem짯ber 25,
2021
  March 27,
2021
 
GAAP net income   $ 786     $ 974     $ 555    
Inte짯rest expense     13       8       9    
Other (inco짯me) expen짯se, net     42       (4 )     11    
Inco짯me tax provision     113       229       89    
Equi짯ty inco짯me in investee     (3 )           (2 )  
Stock-based com짯pen짯sa짯ti짯on     174       112       85    
Depre짯cia짯ti짯on and amortization     130       118       95    
Amor짯tiza짯ti짯on of acqui짯red intan짯gi짯ble assets     479                
Acqui짯si짯ti짯on-rela짯ted costs     233       9       15    
Adjus짯ted EBITDA   $ 1,967     $ 1,446     $ 857    

 

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, depre짯cia짯ti짯on and amor짯tiza짯ti짯on expen짯se and acqui짯si짯ti짯on-rela짯ted cos짯ts. The Com짯pa짯ny also included amor짯tiza짯ti짯on of acqui짯red intan짯gi짯ble assets for the three months ended March 26, 2022. 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 has pro짯vi짯ded recon짯ci짯lia짯ti짯ons within the ear짯nings press release of the짯se Non-GAAP finan짯cial mea짯su짯res to the most direct짯ly com짯pa짯ra짯ble GAAP finan짯cial measures.

 

(3)     Recon짯ci짯lia짯ti짯on of GAAP Net Cash Pro짯vi짯ded by Ope짯ra짯ting Acti짯vi짯ties to Free Cash Flow

 

    Three Months Ended  
    March 26,
2022
  Decem짯ber 25,
2021
  March 27,
2021
 
GAAP net cash pro짯vi짯ded by ope짯ra짯ting activities   $ 995     $ 822     $ 898    
Ope짯ra짯ting cash flow margin %     17 %     17 %     26 %  
Purcha짯ses of pro짯per짯ty and equipment     (71 )     (86 )     (66 )  
Free cash flow   $ 924     $ 736     $ 832    
Free cash flow margin %     16 %     15 %     24 %  

 

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 acti짯vi짯ties. The Com짯pa짯ny has pro짯vi짯ded recon짯ci짯lia짯ti짯ons within the ear짯nings press release of the짯se Non-GAAP finan짯cial mea짯su짯res to the most direct짯ly com짯pa짯ra짯ble GAAP finan짯cial measures.