AMD Announces Preliminary Third Quarter 2022 Financial Results

  • Preli짯mi짯na짯ry third quar짯ter reve짯nue of appro짯xi짯m짯ate짯ly $5.6 bil짯li짯on, lower than pri짯or out짯look of $6.7 bil짯li짯on plus or minus $200 mil짯li짯on, pri짯ma짯ri짯ly due to wea짯k짯er Cli짯ent seg짯ment revenue
  • Reve짯nue for Data Cen짯ter, Gam짯ing, and Embedded Seg짯ments each grew signi짯fi짯cant짯ly year-over-year and in-line with the company셲 expectations
  • Manage짯ment to dis짯cuss finan짯cial results and out짯look on Nov. 1 ear짯nings call

SANTA CLARA, Calif., Oct. 06, 2022 (GLOBE NEWSWIRE)  AMD (NASDAQ:AMD) today announ짯ced sel짯ec짯ted preli짯mi짯na짯ry finan짯cial results for the third quar짯ter of 2022.

Third quar짯ter reve짯nue is expec짯ted to be appro짯xi짯m짯ate짯ly $5.6 bil짯li짯on, an increase of 29% year-over-year. AMD pre짯vious짯ly expec짯ted reve짯nue to increase appro짯xi짯m짯ate짯ly 55% year-over-year at the mid-point of gui짯dance. Preli짯mi짯na짯ry results reflect lower than expec짯ted Cli짯ent seg짯ment reve짯nue resul짯ting from redu짯ced pro짯ces짯sor ship짯ments due to a wea짯k짯er than expec짯ted PC mar짯ket and signi짯fi짯cant inven짯to짯ry cor짯rec짯tion actions across the PC sup짯p짯ly chain.

Reve짯nue for the Data Cen짯ter, Gam짯ing, and Embedded seg짯ments each increased signi짯fi짯cant짯ly year-over-year in-line with the company셲 expectations.

Gross mar짯gin is expec짯ted to be appro짯xi짯m짯ate짯ly 42% and non-GAAP(*) gross mar짯gin is expec짯ted to be appro짯xi짯m짯ate짯ly 50%. AMD pre짯vious짯ly expec짯ted non-GAAP gross mar짯gin to be appro짯xi짯m짯ate짯ly 54%. The gross mar짯gin short짯fall to expec짯ta짯ti짯ons was pri짯ma짯ri짯ly due to lower reve짯nue dri짯ven by lower Cli짯ent pro짯ces짯sor unit ship짯ments and avera짯ge sel짯ling pri짯ce (ASP). In addi짯ti짯on, the third quar짯ter results are expec짯ted to include appro짯xi짯m짯ate짯ly $160 mil짯li짯on of char짯ges pri짯ma짯ri짯ly for inven짯to짯ry, pri짯cing, and rela짯ted reser짯ves in the gra짯phics and cli짯ent businesses.
Third quar짯ter ope짯ra짯ting expen짯ses are expec짯ted to be appro짯xi짯m짯ate짯ly $2.4 bil짯li짯on and non-GAAP ope짯ra짯ting expen짯ses are expec짯ted to be appro짯xi짯m짯ate짯ly $1.5 bil짯li짯on. Non-GAAP ope짯ra짯ting expen짯ses are lower than pre짯vious expec짯ta짯ti짯ons of $1.6 bil짯li짯on dri짯ven by lower varia짯ble com짯pen짯sa짯ti짯on expen짯ses in the quarter.

The PC mar짯ket wea짯k짯en짯ed signi짯fi짯cant짯ly in the quar짯ter, said AMD Chair and CEO Dr. Lisa Su. 쏻hile our pro짯duct port짯fo짯lio remains very strong, macroe짯co짯no짯mic con짯di짯ti짯ons dro짯ve lower than expec짯ted PC demand and a signi짯fi짯cant inven짯to짯ry cor짯rec짯tion across the PC sup짯p짯ly chain. As we navi짯ga짯te the cur짯rent mar짯ket con짯di짯ti짯ons, we are plea짯sed with the per짯for짯mance of our Data Cen짯ter, Embedded, and Gam짯ing seg짯ments and the strength of our diver짯si짯fied busi짯ness model and balan짯ce sheet. We remain focu짯sed on deli짯ve짯ring our lea짯der짯ship pro짯duct road짯map and look for짯ward to laun짯ching our next-gene짯ra짯ti짯on 5nm data cen짯ter and gra짯phics pro짯ducts later this quarter.

  Q3 FY22 Out짯look(1) Q3 FY22 Preli짯mi짯na짯ry Results
Reve짯nue ~$6.7 bil짯li짯on, plus or minus $200 million ~$5.6 bil짯li짯on
Gross mar짯gin  GAAP - ~42%
Gross mar짯gin non-GAAP ~54% ~50%
Ope짯ra짯ting expen짯ses  GAAP - ~$2.4 bil짯li짯on
Ope짯ra짯ting expen짯ses non-GAAP ~$1.6 bil짯li짯on ~$1.5 bil짯li짯on

(1) Announ짯ced with the company셲 second quar짯ter 2022 finan짯cial results in August 2022.

Seg짯ment(2) Revenue
($ in billions)
Q3 FY22
Preli짯mi짯na짯ry Results
Q/Q Y/Y
Data Cen짯ter ~$1.6 Up 8% Up 45%
Cli짯ent ~$1.0 Down 53% Down 40%
Gam짯ing ~$1.6 Flat Up 14%
Embedded ~$1.3 Up 4% Up 1,549%
Total ~$5.6 Down 15% Up 29%

This update does not pre짯sent all neces짯sa짯ry infor짯ma짯ti짯on for an under짯stan짯ding of AMD셲 finan짯cial con짯di짯ti짯on as of the date of this release, or its results of ope짯ra짯ti짯ons for the third quar짯ter of 2022. As AMD com짯ple짯tes its quar짯ter-end finan짯cial clo짯se pro짯cess and fina짯li짯zes its finan짯cial state짯ments for the quar짯ter, it will be requi짯red to make judgments in a num짯ber of are짯as. It is pos짯si짯ble that AMD may iden짯ti짯fy items that requi짯re it to make adjus짯t짯ments to the preli짯mi짯na짯ry finan짯cial infor짯ma짯ti짯on set forth abo짯ve and tho짯se adjus짯t짯ments could be mate짯ri짯al. AMD does not intend to update any finan짯cial infor짯ma짯ti짯on pri짯or to release of its final third quar짯ter finan짯cial state짯ment infor짯ma짯ti짯on, which is curr짯ent짯ly sche짯du짯led for Nov. 1, 2022.

AMD Q322 Ear짯nings Con짯fe짯rence Call
AMD will hold a con짯fe짯rence call for the finan짯cial com짯mu짯ni짯ty at 2:00 p.m. PT (5:00 p.m. ET) on Nov. 1, 2022 to dis짯cuss its third 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.

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 AMD셲 preli짯mi짯na짯ry third quar짯ter 2022 finan짯cial results, expec짯ted inven짯to짯ry, pri짯cing and rela짯ted reser짯ve char짯ges in the gra짯phics and cli짯ent busi짯nesses; AMD셲 abili짯ty to deli짯ver its lea짯der짯ship pro짯duct road짯map; and laun짯ching next-gene짯ra짯ti짯on 5 nm data cen짯ter and gra짯phics pro짯ducts in the fourth quar짯ter of 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; poten짯ti짯al dif짯fi짯cul짯ties in upgrading and ope짯ra짯ting AMD셲 new enter짯pri짯se resour짯ce plan짯ning sys짯tem; 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, inclu짯ding acqui짯si짯ti짯ons of Xilinx and Pen짯san짯do, on AMD셲 busi짯ness and AMD셲 abili짯ty to inte짯gra짯te acqui짯red busi짯nesses; 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 press release, in addi짯ti짯on to sel짯ec짯ted preli짯mi짯na짯ry GAAP finan짯cial results, AMD has pro짯vi짯ded preli짯mi짯na짯ry non-GAAP finan짯cial mea짯su짯res inclu짯ding non-GAAP gross mar짯gin and non-GAAP ope짯ra짯ting expen짯ses. 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 is pro짯vi짯ding the짯se preli짯mi짯na짯ry 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. The preli짯mi짯na짯ry non-GAAP finan짯cial mea짯su짯res dis짯c짯lo짯sed in this press release should be view짯ed in addi짯ti짯on to and not as a sub짯sti짯tu짯te for or supe짯ri짯or to AMD셲 preli짯mi짯na짯ry results pre짯pared in accordance with GAAP. The짯se preli짯mi짯na짯ry non-GAAP finan짯cial mea짯su짯res refe짯ren짯ced are recon짯ci짯led to their most direct짯ly com짯pa짯ra짯ble preli짯mi짯na짯ry GAAP finan짯cial mea짯su짯res at the end of this press release.
(2)   The Data Cen짯ter seg짯ment pri짯ma짯ri짯ly includes ser짯ver micro짯pro짯ces짯sors, GPUs, data pro짯ces짯sing units (DPUs), Field Pro짯gramma짯ble Gate Arrays (FPGAs) and adap짯ti짯ve SoC pro짯ducts for data centers.
  The Cli짯ent seg짯ment pri짯ma짯ri짯ly includes micro짯pro짯ces짯sors, acce짯le짯ra짯ted pro짯ces짯sing units (APUs) that inte짯gra짯te micro짯pro짯ces짯sors and gra짯phics, and chip짯sets for desk짯top and note짯book per짯so짯nal computers.
  The Gam짯ing seg짯ment pri짯ma짯ri짯ly includes dis짯crete gra짯phics pro짯ces짯sing units (GPUs), semi-cus짯tom Sys짯tem-on-Chip (SoC) pro짯ducts and deve짯lo짯p짯ment services.
  The Embedded seg짯ment pri짯ma짯ri짯ly includes embedded micro짯pro짯ces짯sors, GPUs, FPGAs, adap짯ti짯ve SoC pro짯ducts, 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, acqui짯si짯ti짯on-rela짯ted cos짯ts and licen짯sing gain.
     
  RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES  
  (Unau짯di짯ted)  
    Q3 FY22
    Preli짯mi짯na짯ry Results
     
  GAAP gross margin % ~42%
  Stock-based com짯pen짯sa짯ti짯on, acqui짯si짯ti짯on-rela짯ted cos짯ts(3), amor짯tiza짯ti짯on of acqui짯red intan짯gi짯ble assets ~8 pps
  Non-GAAP gross margin % ~50%
     
  GAAP ope짯ra짯ting expen짯ses ($ in billions) ~$2.4
  Stock-based com짯pen짯sa짯ti짯on, acqui짯si짯ti짯on-rela짯ted cos짯ts(3), amor짯tiza짯ti짯on of acqui짯red intan짯gi짯ble assets ~$(0.9)
  Non-GAAP ope짯ra짯ting expenses ~$1.5
     
(3) Acqui짯si짯ti짯on-rela짯ted cos짯ts pri짯ma짯ri짯ly com짯pri짯sed of tran짯sac짯tion cos짯ts, purcha짯se pri짯ce adjus짯t짯ments for inven짯to짯ry and cer짯tain com짯pen짯sa짯ti짯on charges

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