AMD Announces Preliminary Third Quarter 2022 Financial Results

  • Preli­mi­na­ry third quar­ter reve­nue of appro­xi­mate­ly $5.6 bil­li­on, lower than pri­or out­look of $6.7 bil­li­on plus or minus $200 mil­li­on, pri­ma­ri­ly due to wea­ker Cli­ent seg­ment revenue
  • Reve­nue for Data Cen­ter, Gaming, and Embed­ded Seg­ments each grew signi­fi­cant­ly year-over-year and in-line with the company’s expectations
  • Manage­ment to dis­cuss finan­cial results and out­look on Nov. 1 ear­nings call

SANTA CLARA, Calif., Oct. 06, 2022 (GLOBE NEWSWIRE) — AMD (NASDAQ:AMD) today announ­ced selec­ted preli­mi­na­ry finan­cial results for the third quar­ter of 2022.

Third quar­ter reve­nue is expec­ted to be appro­xi­mate­ly $5.6 bil­li­on, an incre­a­se of 29% year-over-year. AMD pre­vious­ly expec­ted reve­nue to incre­a­se appro­xi­mate­ly 55% year-over-year at the mid-point of gui­d­ance. Preli­mi­na­ry results reflect lower than expec­ted Cli­ent seg­ment reve­nue resul­ting from redu­ced pro­ces­sor ship­ments due to a wea­ker than expec­ted PC mar­ket and signi­fi­cant inven­to­ry cor­rec­tion actions across the PC sup­ply chain.

Reve­nue for the Data Cen­ter, Gaming, and Embed­ded seg­ments each incre­a­sed signi­fi­cant­ly year-over-year in-line with the company’s expectations.

Gross mar­gin is expec­ted to be appro­xi­mate­ly 42% and non-GAAP(*) gross mar­gin is expec­ted to be appro­xi­mate­ly 50%. AMD pre­vious­ly expec­ted non-GAAP gross mar­gin to be appro­xi­mate­ly 54%. The gross mar­gin short­fall to expec­ta­ti­ons was pri­ma­ri­ly due to lower reve­nue dri­ven by lower Cli­ent pro­ces­sor unit ship­ments and average sel­ling pri­ce (ASP). In addi­ti­on, the third quar­ter results are expec­ted to inclu­de appro­xi­mate­ly $160 mil­li­on of char­ges pri­ma­ri­ly for inven­to­ry, pri­cing, and rela­ted reser­ves in the gra­phics and cli­ent businesses.
Third quar­ter ope­ra­ting expen­ses are expec­ted to be appro­xi­mate­ly $2.4 bil­li­on and non-GAAP ope­ra­ting expen­ses are expec­ted to be appro­xi­mate­ly $1.5 bil­li­on. Non-GAAP ope­ra­ting expen­ses are lower than pre­vious expec­ta­ti­ons of $1.6 bil­li­on dri­ven by lower varia­ble com­pen­sa­ti­on expen­ses in the quarter.

The PC mar­ket wea­ke­ned signi­fi­cant­ly in the quar­ter,” said AMD Chair and CEO Dr. Lisa Su. “While our pro­duct port­fo­lio remains very strong, macroeco­no­mic con­di­ti­ons dro­ve lower than expec­ted PC demand and a signi­fi­cant inven­to­ry cor­rec­tion across the PC sup­ply chain. As we navi­ga­te the cur­rent mar­ket con­di­ti­ons, we are plea­sed with the per­for­mance of our Data Cen­ter, Embed­ded, and Gaming seg­ments and the strength of our diver­si­fied busi­ness model and balan­ce sheet. We remain focu­sed on deli­vering our lea­ders­hip pro­duct road­map and look for­ward to laun­ching our next-genera­ti­on 5nm data cen­ter and gra­phics pro­ducts later this quarter.”

  Q3 FY22 Out­look(1) Q3 FY22 Preli­mi­na­ry Results
Reve­nue ~$6.7 bil­li­on, plus or minus $200 million ~$5.6 bil­li­on
Gross mar­gin – GAAP - ~42%
Gross mar­gin – non-GAAP ~54% ~50%
Ope­ra­ting expen­ses – GAAP - ~$2.4 bil­li­on
Ope­ra­ting expen­ses – non-GAAP ~$1.6 bil­li­on ~$1.5 bil­li­on

(1) Announ­ced with the company’s second quar­ter 2022 finan­cial results in August 2022.

Seg­ment(2) Revenue
($ in billions)
Q3 FY22
Preli­mi­na­ry Results
Q/Q Y/Y
Data Cen­ter ~$1.6 Up 8% Up 45%
Cli­ent ~$1.0 Down 53% Down 40%
Gaming ~$1.6 Flat Up 14%
Embed­ded ~$1.3 Up 4% Up 1,549%
Total ~$5.6 Down 15% Up 29%

This update does not pre­sent all necessa­ry infor­ma­ti­on for an under­stan­ding of AMD’s finan­cial con­di­ti­on as of the date of this release, or its results of ope­ra­ti­ons for the third quar­ter of 2022. As AMD com­ple­tes its quar­ter-end finan­cial clo­se pro­cess and fina­li­zes its finan­cial state­ments for the quar­ter, it will be requi­red to make judgments in a num­ber of are­as. It is pos­si­ble that AMD may iden­ti­fy items that requi­re it to make adjus­t­ments to the preli­mi­na­ry finan­cial infor­ma­ti­on set forth abo­ve and tho­se adjus­t­ments could be mate­ri­al. AMD does not intend to update any finan­cial infor­ma­ti­on pri­or to release of its final third quar­ter finan­cial state­ment infor­ma­ti­on, which is cur­r­ent­ly sche­du­led for Nov. 1, 2022.

AMD Q3’22 Ear­nings Con­fe­rence Call
AMD will hold a con­fe­rence call for the finan­cial com­mu­ni­ty at 2:00 p.m. PT (5:00 p.m. ET) on Nov. 1, 2022 to dis­cuss its third quar­ter 2022 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.

About AMD
For more than 50 years AMD has dri­ven inno­va­ti­on in high-per­for­mance com­pu­ting, gra­phics and visua­liz­a­ti­on tech­no­lo­gies. AMD employees are focu­sed on buil­ding lea­ders­hip high-per­for­mance and adap­ti­ve pro­ducts that push the bounda­ries of what is pos­si­ble. Bil­li­ons of peop­le, lea­ding For­tu­ne 500 busi­nes­ses and cut­ting-edge sci­en­ti­fic rese­arch insti­tu­ti­ons around the world rely on AMD tech­no­lo­gy dai­ly to impro­ve how they live, work and play. 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 AMD’s preli­mi­na­ry third quar­ter 2022 finan­cial results, expec­ted inven­to­ry, pri­cing and rela­ted reser­ve char­ges in the gra­phics and cli­ent busi­nes­ses; AMD’s abi­li­ty to deli­ver its lea­ders­hip pro­duct road­map; and laun­ching next-genera­ti­on 5 nm data cen­ter and gra­phics pro­ducts in the fourth quar­ter of 2022, which are made pur­suant to the Safe Har­bor pro­vi­si­ons of the Pri­va­te Secu­ri­ties Liti­ga­ti­on Reform Act of 1995. For­ward-loo­king state­ments are com­mon­ly iden­ti­fied by words such as “would,” “may,” “expects,” “belie­ves,” “plans,” “intends,” “pro­jects” and other terms with simi­lar mea­ning. Inves­tors are cau­tio­ned that the for­ward-loo­king state­ments in this press release are based on cur­rent beliefs, assump­ti­ons and expec­ta­ti­ons, speak only as of the date of this press release and invol­ve risks and uncer­tain­ties that could cau­se actu­al results to dif­fer mate­ri­al­ly from cur­rent expec­ta­ti­ons. Such state­ments are sub­ject to cer­tain known and unknown risks and uncer­tain­ties, many of which are dif­fi­cult to pre­dict and gene­ral­ly bey­ond AMD’s con­trol, that could cau­se actu­al results and other future events to dif­fer mate­ri­al­ly from tho­se expres­sed in, or implied or pro­jec­ted by, the for­ward-loo­king infor­ma­ti­on and state­ments. Mate­ri­al fac­tors that could cau­se actu­al results to dif­fer mate­ri­al­ly from cur­rent expec­ta­ti­ons inclu­de, without limi­ta­ti­on, the fol­lowing: Intel Corporation’s domi­nan­ce of the micro­pro­ces­sor mar­ket and its aggres­si­ve busi­ness prac­ti­ces; glo­bal eco­no­mic uncer­tain­ty; loss of a signi­fi­cant cus­to­mer; impact of the COVID-19 pan­de­mic on AMD’s busi­ness, finan­cial con­di­ti­on and results of ope­ra­ti­ons; com­pe­ti­ti­ve mar­kets in which AMD’s pro­ducts are sold; mar­ket con­di­ti­ons of the indus­tries in which AMD pro­ducts are sold; cycli­cal natu­re of the semi­con­duc­tor indus­try; quar­ter­ly and sea­so­nal sales pat­terns; AMD’s abi­li­ty to ade­qua­te­ly pro­tect its tech­no­lo­gy or other intel­lec­tu­al pro­per­ty; unfa­vor­able cur­ren­cy exchan­ge rate fluc­tua­tions; abi­li­ty of third par­ty manu­fac­tu­rers to manu­fac­tu­re AMD’s pro­ducts on a time­ly basis in suf­fi­ci­ent quan­ti­ties and using com­pe­ti­ti­ve tech­no­lo­gies; avai­la­bi­li­ty of essen­ti­al equip­ment, mate­ri­als, sub­stra­tes or manu­fac­tu­ring pro­ces­ses; abi­li­ty to achie­ve expec­ted manu­fac­tu­ring yiel­ds for AMD’s pro­ducts; AMD’s abi­li­ty to intro­du­ce pro­ducts on a time­ly basis with expec­ted fea­tures and per­for­mance levels; AMD’s abi­li­ty to gene­ra­te reve­nue from its semi-cus­tom SoC pro­ducts; poten­ti­al secu­ri­ty vul­nera­bi­li­ties; poten­ti­al secu­ri­ty inci­dents inclu­ding IT outa­ges, data loss, data breaches and cyber-attacks; poten­ti­al dif­fi­cul­ties in upgrading and ope­ra­ting AMD’s new enter­pri­se resour­ce plan­ning sys­tem; 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 design, manu­fac­tu­re and sup­ply of mother­boards, soft­ware and other com­pu­ter plat­form com­pon­ents; AMD’s reli­an­ce on Micro­soft 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; 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; effi­ci­en­cy of AMD’s sup­ply chain; AMD’s abi­li­ty to rely on third par­ty sup­ply-chain logistics func­tions; AMD’s abi­li­ty to effec­tively con­trol sales of its pro­ducts on the gray mar­ket; 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; impact of envi­ron­men­tal laws, con­flict mine­rals-rela­ted pro­vi­si­ons and other laws or regu­la­ti­ons; impact of acqui­si­ti­ons, joint ven­tures and/or invest­ments, inclu­ding acqui­si­ti­ons of Xilinx and Pen­san­do, on AMD’s busi­ness and AMD’s abi­li­ty to inte­gra­te acqui­red busi­nes­ses; impact of any impairment of the com­bi­ned company’s assets on the com­bi­ned company’s finan­cial posi­ti­on and results of ope­ra­ti­on; restric­tions impo­sed by agree­ments gover­ning AMD’s notes, the gua­ran­tees of Xilinx’s notes and the revol­ving credit faci­li­ty; AMD’s indeb­ted­ness; AMD’s abi­li­ty to gene­ra­te suf­fi­ci­ent cash to meet its working capi­tal requi­re­ments or gene­ra­te suf­fi­ci­ent reve­nue and ope­ra­ting cash flow to make all of its plan­ned R&D or 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 press release, in addi­ti­on to selec­ted preli­mi­na­ry GAAP finan­cial results, AMD has pro­vi­ded preli­mi­na­ry non-GAAP finan­cial mea­su­res inclu­ding non-GAAP gross mar­gin and non-GAAP ope­ra­ting expen­ses. 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 2022, AMD uses a pro­jec­ted non-GAAP tax rate of 13%, which exclu­des the tax impact of pre-tax non-GAAP adjus­t­ments, reflec­ting cur­r­ent­ly avail­ab­le infor­ma­ti­on. AMD is pro­vi­ding the­se preli­mi­na­ry 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. The preli­mi­na­ry non-GAAP finan­cial mea­su­res dis­c­lo­sed in this press release should be view­ed in addi­ti­on to and not as a sub­sti­tu­te for or supe­ri­or to AMD’s preli­mi­na­ry results pre­pa­red in accordance with GAAP. The­se preli­mi­na­ry non-GAAP finan­cial mea­su­res refe­ren­ced are recon­ci­led to their most direct­ly com­pa­ra­ble preli­mi­na­ry GAAP finan­cial mea­su­res at the end of this press release.
(2)   The Data Cen­ter seg­ment pri­ma­ri­ly inclu­des ser­ver micro­pro­ces­sors, GPUs, data pro­ces­sing units (DPUs), Field Pro­gramm­a­ble Gate Arrays (FPGAs) and adap­ti­ve SoC pro­ducts for data centers.
  The Cli­ent seg­ment pri­ma­ri­ly inclu­des micro­pro­ces­sors, acce­le­ra­ted pro­ces­sing units (APUs) that inte­gra­te micro­pro­ces­sors and gra­phics, and chip­sets for desk­top and note­book per­so­nal computers.
  The Gaming seg­ment pri­ma­ri­ly inclu­des dis­cre­te gra­phics pro­ces­sing units (GPUs), semi-cus­tom Sys­tem-on-Chip (SoC) pro­ducts and deve­lo­p­ment services.
  The Embed­ded seg­ment pri­ma­ri­ly inclu­des embed­ded micro­pro­ces­sors, GPUs, FPGAs, adap­ti­ve SoC pro­ducts, and Adap­ti­ve Com­pu­te Acce­le­ra­ti­on Plat­form (ACAP) products.
  From time to time, the Com­pa­ny may also sell or licen­se por­ti­ons of its IP portfolio.
  All Other cate­go­ry pri­ma­ri­ly inclu­des cer­tain expen­ses and credits that are not allo­ca­ted to any of the ope­ra­ting seg­ments. Also inclu­ded in this cate­go­ry are acqui­si­ti­on-rela­ted intan­gi­ble asset amor­tiz­a­ti­on expen­se, stock-based com­pen­sa­ti­on expen­se, acqui­si­ti­on-rela­ted cos­ts and licen­sing gain.
     
  RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES  
  (Unau­di­ted)  
    Q3 FY22
    Preli­mi­na­ry Results
     
  GAAP gross margin % ~42%
  Stock-based com­pen­sa­ti­on, acqui­si­ti­on-rela­ted cos­ts(3), amor­tiz­a­ti­on of acqui­red intan­gi­ble assets ~8 pps
  Non-GAAP gross margin % ~50%
     
  GAAP ope­ra­ting expen­ses ($ in billions) ~$2.4
  Stock-based com­pen­sa­ti­on, acqui­si­ti­on-rela­ted cos­ts(3), amor­tiz­a­ti­on of acqui­red intan­gi­ble assets ~$(0.9)
  Non-GAAP ope­ra­ting expenses ~$1.5
     
(3) Acqui­si­ti­on-rela­ted cos­ts pri­ma­ri­ly com­pri­sed of tran­sac­tion cos­ts, purcha­se pri­ce adjus­t­ments for inven­to­ry and cer­tain com­pen­sa­ti­on charges

AMD, the AMD Arrow logo, EPYC, Rade­on, Ryzen, Thre­ad­rip­per, Ver­sal 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