AMD Reports First Quarter 2023 Financial Results

SANTA CLARA, Calif., May 02, 2023 (GLOBE NEWSWIRE)  AMD (NASDAQ:AMD) today announ짯ced reve짯nue for the first quar짯ter of 2023 of $5.4 bil짯li짯on, gross mar짯gin of 44%, ope짯ra짯ting loss of $145 mil짯li짯on, net loss of $139 mil짯li짯on and diluted loss per share of $0.09. On a non-GAAP(*) basis, gross mar짯gin was 50%, ope짯ra짯ting inco짯me was $1.1 bil짯li짯on, net inco짯me was $970 mil짯li짯on and diluted ear짯nings per share was $0.60.

We exe짯cu짯ted very well in the first quar짯ter as we deli짯ver짯ed bet짯ter than expec짯ted reve짯nue and ear짯nings in a mixed demand envi짯ron짯ment, said AMD Chair and CEO Dr. Lisa Su. 쏻e laun짯ched mul짯ti짯ple lea짯der짯ship pro짯ducts and made signi짯fi짯cant pro짯gress acce짯le짯ra짯ting our AI road짯map and cus짯to짯mer enga짯ge짯ments in the quar짯ter. Lon짯ger-term, we see signi짯fi짯cant growth oppor짯tu짯ni짯ties as we suc짯cessful짯ly deli짯ver our road짯maps, exe짯cu짯te our stra짯te짯gic data cen짯ter and embedded prio짯ri짯ties and acce짯le짯ra짯te adop짯ti짯on of our AI portfolio.

Our stra짯te짯gi짯cal짯ly important Data Cen짯ter and Embedded seg짯ments con짯tri짯bu짯ted more than 50 per짯cent of reve짯nue in the first quar짯ter, said AMD EVP, CFO and Tre짯asurer Jean Hu. 쏤or the second quar짯ter we expect sequen짯ti짯al growth in our Data Cen짯ter and Cli짯ent seg짯ments off짯set by mode짯st decli짯nes in our Gam짯ing and Embedded seg짯ments. We remain con짯fi짯dent in our growth in the second half of the year as the PC and ser짯ver mar짯kets streng짯then and our new pro짯ducts ramp.

GAAP Quar짯ter짯ly Finan짯cial Results

  Q1 2023 Q1 2022 Y/Y
Reve짯nue ($M) $5,353 $5,887 Down 9%
Gross pro짯fit ($M) $2,359 $2,818 Down 16%
Gross mar짯gin % 44% 48% Down 4 ppts
Ope짯ra짯ting expen짯ses ($M) $2,514 $1,950 Up 29%
Ope짯ra짯ting inco짯me (loss) ($M) $(145) $951 Down 115%
Ope짯ra짯ting margin % (3)% 16% Down 19 ppts
Net inco짯me (loss) ($M) $(139) $786 Down 118%
Ear짯nings (loss) per share $(0.09) $0.56 Down 116%

Non-GAAP(*) Quar짯ter짯ly Finan짯cial Results

  Q1 2023 Q1 2022 Y/Y
Reve짯nue ($M) $5,353 $5,887 Down 9%
Gross pro짯fit ($M) $2,675 $3,100 Down 14%
Gross mar짯gin % 50% 53% Down 3 ppts
Ope짯ra짯ting expen짯ses ($M) $1,587 $1,346 Up 18%
Ope짯ra짯ting inco짯me ($M) $1,098 $1,837 Down 40%
Ope짯ra짯ting margin % 21% 31% Down 10 ppts
Net inco짯me ($M) $970 $1,589 Down 39%
Ear짯nings per share $0.60 $1.13 Down 47%


Recent PR Highlights

  • AMD con짯ti짯nues to lead in con짯fi짯den짯ti짯al com짯pu짯ting as major cloud ser짯vice pro짯vi짯ders inclu짯ding Micro짯soft Azu짯reGoog짯le Cloud and Ora짯cle Cloud Infra짯struc짯tu짯re announ짯ced new capa짯bi짯li짯ties based on AMD EPYC꽓 processors.
  • AMD expan짯ded capa짯bi짯li짯ties for deve짯lo짯pers to build robust AI solu짯ti짯ons lever짯aging AMD pro짯ducts inclu짯ding updates to the PyTorch Foun짯da짯ti짯on셲 PyTorch 2.0 frame짯work which now offers nati짯ve sup짯port for ROCm soft짯ware and the latest Ten짯sor짯Flow-ZenDNN plug-in, which enables neu짯ral net짯work infe짯ren짯cing on AMD EPYC CPUs.
  • AMD announ짯ced the AMD Alveo꽓 MA35D media acce짯le짯ra짯tor to power a new era of live inter짯ac짯ti짯ve strea짯ming ser짯vices at sca짯le, fea짯turing an inte짯gra짯ted AI pro짯ces짯sor that dyna짯mi짯cal짯ly adjus짯ts video quality.
  • AMD expan짯ded its embedded pro짯ces짯sor port짯fo짯lio with powerful, sca짯lable offe짯rings for a varie짯ty of embedded applications: 
    • The AMD Ryzen꽓 Embedded 5000 Series pro짯ces짯sors deli짯ver mid-ran짯ge, sca짯lable and effi짯ci짯ent per짯for짯mance opti짯mi짯zed for 쏿lways on net짯wor짯king fire짯walls, net짯work-atta짯ched sto짯rage sys짯tems and other secu짯ri짯ty applications.
    • The new AMD EPYC Embedded 9004 Series pro짯ces짯sors bring per짯for짯mance and ener짯gy effi짯ci짯en짯cy to embedded net짯wor짯king, secu짯ri짯ty and fire짯wall, and sto짯rage sys짯tems in cloud and enter짯pri짯se com짯pu짯ting, as well as indus짯tri짯al edge servers.
  • AMD show짯ca짯sed its gro짯wing pre짯sence in the tel짯co space, inclu짯ding announ짯cing a Tel짯co Solu짯ti짯ons test짯ing lab to sup짯port the vali짯da짯ti짯on of end-to-end AMD based solu짯ti짯ons, laun짯ching Zynq꽓 UltraS짯ca짯le+꽓 RFSoC pro짯ducts to acce짯le짯ra짯te the deploy짯ment of 4G/5G radi짯os in emer짯ging mar짯kets, and expan짯ding the col짯la짯bo짯ra짯ti짯on with Nokia to power Nokia Cloud RAN solu짯ti짯ons to help com짯mu짯ni짯ca짯ti짯ons ser짯vice pro짯vi짯ders achie짯ve their most strin짯gent ener짯gy effi짯ci짯en짯cy goals.
  • AMD Ryzen mobi짯le pro짯ces짯sors are powe짯ring new com짯mer짯cial, con짯su짯mer and gam짯ing experiences. 
    • The new AMD Ryzen Z1 and Z1 Extre짯me pro짯ces짯sors, fea짯turing AMD RDNA 3 archi짯tec짯tu짯re-based gra짯phics, bring ulti짯ma짯te por짯ta짯bi짯li짯ty and bat짯tery life to hand짯held PC gam짯ing con짯so짯les, inclu짯ding the Asus ROG Ally.
    • HPI announ짯ced hard짯ware and soft짯ware offe짯rings for the hybrid work짯place powered by next-gen Ryzen pro짯ces짯sors. HPI also announ짯ced the next gene짯ra짯ti짯on OMEN 16 and Vic짯tus 16 lap짯tops fea짯turing up to an AMD Ryzen 9 7940HS processor.
    • Leno짯vo announ짯ced the Legi짯on Slim 7 fea짯turing up to an AMD Ryzen 9 7940HS pro짯ces짯sor, as well as addi짯ti짯ons to the Yoga lin짯e짯up fea짯turing AMD Ryzen 7000 Series processors.
    • AMD part짯ne짯red with HPI to co-engi짯neer their Dra짯gon짯fly Pro powered by cus짯tom AMD Ryzen 7 7736U processors.
    • Frame짯work intro짯du짯ced AMD-powered ver짯si짯ons of both their Frame짯work Lap짯top 13 and new짯ly announ짯ced Lap짯top 16.
  • Sam짯sung and AMD announ짯ced they signed a mul짯ti-year agree짯ment exten짯si짯on to bring mul짯ti짯ple gene짯ra짯ti짯ons of high-per짯for짯mance, ultra-low-power AMD Rade짯on꽓 gra짯phics solu짯ti짯ons to an expan짯ded port짯fo짯lio of Sam짯sung Exy짯nos SoCs.
  • AMD announ짯ced the AMD Rade짯on PRO W7000 Series gra짯phics, the first pro짯fes짯sio짯nal gra짯phics cards built on the advan짯ced AMD chip짯let design to deli짯ver lea짯der짯ship per짯for짯mance and uni짯que features.
  • AMD Fide짯li짯ty짯FX꽓 Super Reso짯lu짯ti짯on tech짯no짯lo짯gy is now sup짯port짯ed in 250 available and upco짯ming games, 110 of which sup짯port FSR 2, the latest update to the cross-plat짯form tem짯po짯ral ups짯ca짯ling technology.
  • AMD announ짯ced that Jack Huynh has been named seni짯or vice pre짯si짯dent and gene짯ral mana짯ger of Com짯pu짯ting and Gra짯phics fol짯lo짯wing the reti짯re짯ment of Rick Berg짯man, the for짯mer exe짯cu짯ti짯ve vice pre짯si짯dent of Com짯pu짯ting and Graphics.

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 2023, AMD expects reve짯nue to be appro짯xi짯m짯ate짯ly $5.3 bil짯li짯on, plus or minus $300 mil짯li짯on. AMD expects non-GAAP gross mar짯gin to be appro짯xi짯m짯ate짯ly 50%.

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 2023 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
    April 1,
2023
  March 26,
2022
GAAP gross profit   $ 2,359     $ 2,818  
GAAP gross margin %     44 %     48 %
Stock-based com짯pen짯sa짯ti짯on     8       4  
Acqui짯si짯ti짯on-rela짯ted cos짯ts (1)     3       92  
Amor짯tiza짯ti짯on of acqui짯red intan짯gi짯ble assets     305       186  
Non-GAAP gross profit   $ 2,675     $ 3,100  
Non-GAAP gross margin %     50 %     53 %
         
GAAP ope짯ra짯ting expenses   $ 2,514     $ 1,950  
GAAP ope짯ra짯ting expenses/revenue %     47 %     33 %
Stock-based com짯pen짯sa짯ti짯on     297       170  
Acqui짯si짯ti짯on-rela짯ted cos짯ts (1)     112       141  
Amor짯tiza짯ti짯on of acqui짯red intan짯gi짯ble assets     518       293  
Non-GAAP ope짯ra짯ting expenses   $ 1,587     $ 1,346  
Non-GAAP ope짯ra짯ting expenses/revenue %     30 %     23 %
         
GAAP ope짯ra짯ting inco짯me (loss)   $ (145 )   $ 951  
GAAP ope짯ra짯ting margin %     (3) %     16 %
Stock-based com짯pen짯sa짯ti짯on     305       174  
Acqui짯si짯ti짯on-rela짯ted cos짯ts (1)     115       233  
Amor짯tiza짯ti짯on of acqui짯red intan짯gi짯ble assets     823       479  
Non-GAAP ope짯ra짯ting income   $ 1,098     $ 1,837  
Non-GAAP ope짯ra짯ting margin %     21 %     31 %
    Three Months Ended
    April 1,
2023
  March 26,
2022
GAAP net inco짯me (loss) / ear짯nings (loss) per share   $ (139 )   $ (0.09 )   $ 786     $ 0.56  
(Gains) los짯ses on equi짯ty invest짯ments, net     (1 )           44       0.03  
Stock-based com짯pen짯sa짯ti짯on     305       0.19       174       0.12  
Equi짯ty inco짯me in investee     (1 )           (3 )      
Acqui짯si짯ti짯on-rela짯ted cos짯ts (1)     115       0.07       233       0.17  
Amor짯tiza짯ti짯on of acqui짯red intan짯gi짯ble assets     823       0.51       479       0.34  
Inco짯me tax provision     (132 )     (0.08 )     (124 )     (0.09 )
Non-GAAP net inco짯me / ear짯nings per share     970       0.60       1,589       1.13  
(1 )   Acqui짯si짯ti짯on-rela짯ted cos짯ts pri짯ma짯ri짯ly com짯pri짯sed of tran짯sac짯tion cos짯ts, purcha짯se pri짯ce adjus짯t짯ments for inven짯to짯ry, cer짯tain com짯pen짯sa짯ti짯on char짯ges and con짯tract termination.
       

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 expec짯ted growth oppor짯tu짯ni짯ties; AMD셲 expec짯ted growth in the second half of 2023; AMD셲 abili짯ty to suc짯cessful짯ly deli짯ver its road짯maps and ramp new pro짯ducts, exe짯cu짯te its data cen짯ter and embedded stra짯te짯gic prio짯ri짯ties and acce짯le짯ra짯te adop짯ti짯on of its AI port짯fo짯lio; the expec짯ted streng짯thening of the PC and ser짯ver mar짯kets; the fea짯tures, func짯tion짯a짯li짯ty, per짯for짯mance, avai짯la짯bi짯li짯ty, timing and expec짯ted bene짯fits of AMD pro짯ducts, and AMD셲 expec짯ted second quar짯ter 2023 finan짯cial out짯look, inclu짯ding reve짯nue and non-GAAP gross mar짯gin and expec짯ted dri짯vers based on cur짯rent expec짯ta짯ti짯ons, which are made pur짯su짯ant to the Safe Har짯bor pro짯vi짯si짯ons of the Pri짯va짯te Secu짯ri짯ties Liti짯ga짯ti짯on Reform Act of 1995. For짯ward-loo짯king state짯ments are com짯mon짯ly iden짯ti짯fied by words such as 쐗ould, 쐌ay, 쐃xpects, 쐀elie짯ves, 쐏lans, 쐇ntends, 쐏ro짯jects and other terms with simi짯lar mea짯ning. Inves짯tors are cau짯tio짯ned that the for짯ward-loo짯king state짯ments in this 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; cycli짯cal natu짯re of the semi짯con짯duc짯tor indus짯try; mar짯ket con짯di짯ti짯ons of the indus짯tries in which AMD pro짯ducts are sold; 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; 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 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 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 diluted 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 2023, 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. 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 in 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 2, 2023 and assump짯ti짯ons and beliefs that invol짯ve num짯e짯rous risks and uncer짯tain짯ties. Adjus짯t짯ments to arri짯ve at the GAAP gross mar짯gin out짯look typi짯cal짯ly include stock-based com짯pen짯sa짯ti짯on, amor짯tiza짯ti짯on of acqui짯red intan짯gi짯ble assets and acqui짯si짯ti짯on-rela짯ted cos짯ts. The timing and impact of such adjus짯t짯ments are depen짯dent on future events that are typi짯cal짯ly uncer짯tain or out짯side of AMD셲 con짯trol, the짯r짯e짯fo짯re, a recon짯ci짯lia짯ti짯on to equi짯va짯lent GAAP mea짯su짯res is not prac짯ti짯ca짯ble at this time. 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, 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
    April 1,
2023
  March 26,
2022
Net reve짯nue   $ 5,353     $ 5,887  
Cost of sales     2,689       2,883  
Amor짯tiza짯ti짯on of acqui짯si짯ti짯on-rela짯ted intangibles     305       186  
Total cost of sales     2,994       3,069  
Gross pro짯fit     2,359       2,818  
Gross mar짯gin %     44 %     48 %
Rese짯arch and development     1,411       1,060  
Mar짯ke짯ting, gene짯ral and administrative     585       597  
Amor짯tiza짯ti짯on of acqui짯si짯ti짯on-rela짯ted intangibles     518       293  
Licen짯sing gain     (10 )     (83 )
Ope짯ra짯ting inco짯me (loss)     (145 )     951  
Inte짯rest expense     (25 )     (13 )
Other inco짯me (expen짯se), net     43       (42 )
Inco짯me (loss) befo짯re inco짯me taxes and equi짯ty income     (127 )     896  
Inco짯me tax provision     13       113  
Equi짯ty inco짯me in investee     1       3  
Net inco짯me (loss)   $ (139 )   $ 786  
Ear짯nings (loss) per share        
Basic   $ (0.09 )   $ 0.56  
Diluted   $ (0.09 )   $ 0.56  
Shares used in per share calculation        
Basic     1,611       1,393  
Diluted     1,611       1,410  
                 
ADVANCED MICRO DEVICES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Mil짯li짯ons)
    April 1,
2023
  Decem짯ber 31,
2022
    (Unau짯di짯ted)    
ASSETS        
Cur짯rent assets:        
Cash and cash equivalents   $ 3,825     $ 4,835  
Short-term invest짯ments     2,114       1,020  
Accounts receiva짯ble, net     4,040       4,126  
Invent짯ories     4,235       3,771  
Receiv짯a짯bles from rela짯ted parties     2       2  
Pre짯paid expen짯ses and other cur짯rent assets     1,442       1,265  
Total cur짯rent assets     15,658       15,019  
Pro짯per짯ty and equip짯ment, net     1,500       1,513  
Ope짯ra짯ting lea짯se right-of use assets     447       460  
Good짯will     24,177       24,177  
Acqui짯si짯ti짯on-rela짯ted intan짯gi짯bles, net     23,291       24,118  
Invest짯ment: equi짯ty method     84       83  
Defer짯red tax assets     67       58  
Other non-cur짯rent assets     2,410       2,152  
Total Assets   $ 67,634     $ 67,580  
         
LIABILITIES AND STOCKHOLDERS EQUITY        
Cur짯rent liabilities:        
Accounts paya짯ble   $ 2,518     $ 2,493  
Paya짯bles to rela짯ted parties     353       463  
Accrued lia짯bi짯li짯ties     3,167       3,077  
Other cur짯rent liabilities     539       336  
Total cur짯rent liabilities     6,577       6,369  
Long-term debt     2,467       2,467  
Long-term ope짯ra짯ting lea짯se liabilities     381       396  
Defer짯red tax liabilities     1,641       1,934  
Other long-term liabilities     1,874       1,664  
         
Stock짯hol짯ders equity:        
Capi짯tal stock:        
Com짯mon stock, par value     16       16  
Addi짯tio짯nal paid-in capital     58,331       58,005  
Tre짯asu짯ry stock, at cost     (3,362 )     (3,099 )
Accu짯mu짯la짯ted deficit     (270 )     (131 )
Accu짯mu짯la짯ted other com짯pre짯hen짯si짯ve loss     (21 )     (41 )
Total stock짯hol짯ders equity   $ 54,694     $ 54,750  
Total Lia짯bi짯li짯ties and Stock짯hol짯ders Equity   $ 67,634     $ 67,580  
 
ADVANCED MICRO DEVICES, INC.
SELECTED CASH FLOW INFORMATION
(Mil짯li짯ons) (Unau짯di짯ted)
    Three Months Ended
    April 1,
2023
  March 26,
2022
Net cash pro짯vi짯ded by (used in)        
Ope짯ra짯ting activities   $ 486     $ 995  
Inves짯t짯ing activities   $ (1,237 )   $ 3,158  
Finan짯cing activities   $ (259 )   $ (1,948 )
                 
SELECTED CORPORATE DATA
(Mil짯li짯ons) (Unau짯di짯ted)
    Three Months Ended
    April 1,
2023
  March 26, 2022
Seg짯ment and Cate짯go짯ry Infor짯ma짯ti짯on(1)        
Data Cen짯ter        
Net reve짯nue   $ 1,295     $ 1,293  
Ope짯ra짯ting income   $ 148     $ 427  
Cli짯ent        
Net reve짯nue   $ 739     $ 2,124  
Ope짯ra짯ting inco짯me (loss)   $ (172 )   $ 692  
Gam짯ing        
Net reve짯nue   $ 1,757     $ 1,875  
Ope짯ra짯ting income   $ 314     $ 358  
Embedded        
Net reve짯nue   $ 1,562     $ 595  
Ope짯ra짯ting income   $ 798     $ 277  
All Other        
Net reve짯nue   $     $  
Ope짯ra짯ting loss   $ (1,233 )   $ (803 )
Total        
Net reve짯nue   $ 5,353     $ 5,887  
Ope짯ra짯ting inco짯me (loss)   $ (145 )   $ 951  
         
Other Data        
Capi짯tal expenditures   $ 158     $ 71  
Adjus짯ted EBITDA (2)   $ 1,257     $ 1,967  
Cash, cash equi짯va짯lents and short-term investments   $ 5,939     $ 6,532  
Free cash flow (3)   $ 328     $ 924  
Total assets   $ 67,634     $ 66,915  
Total debt   $ 2,467     $ 1,787  
(1 )   The Data Cen짯ter seg짯ment pri짯ma짯ri짯ly includes ser짯ver micro짯pro짯ces짯sors (CPUs) and gra짯phics pro짯ces짯sing units (GPUs), data pro짯ces짯sing units (DPUs), Field Pro짯gramma짯ble Gate Arrays (FPGAs) and Adap짯ti짯ve Sys짯tem-on-Chip (SoC) pro짯ducts for data centers.
    The Cli짯ent seg짯ment pri짯ma짯ri짯ly includes CPUs, acce짯le짯ra짯ted pro짯ces짯sing units that inte짯gra짯te micro짯pro짯ces짯sors and GPUs (APUs), and chip짯sets for desk짯top and note짯book per짯so짯nal computers.
    The Gam짯ing seg짯ment pri짯ma짯ri짯ly includes dis짯crete GPUs, semi-cus짯tom SoC pro짯ducts and deve짯lo짯p짯ment services.
    The Embedded seg짯ment pri짯ma짯ri짯ly includes embedded CPUs and GPUs, FPGAs, and Adap짯ti짯ve SoC 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, such as amor짯tiza짯ti짯on of acqui짯si짯ti짯on-rela짯ted intan짯gi짯ble asset, employee stock-based com짯pen짯sa짯ti짯on expen짯se, acqui짯si짯ti짯on-rela짯ted cos짯ts and licen짯sing gain.
     
(2)   Recon짯ci짯lia짯ti짯on of GAAP Net Inco짯me (Loss) to Adjus짯ted EBITDA
    Three Months Ended    
    April 1,
2023
    March 26,
2022
   
GAAP net inco짯me (loss)   $               (139 )   $                 786    
Inte짯rest expense                       25                         13    
Other (inco짯me) expen짯se, net                     (43 )                       42    
Inco짯me tax provision                       13                       113    
Equi짯ty inco짯me in investee                       (1 )                       (3 )  
Stock-based com짯pen짯sa짯ti짯on                     305                       174    
Depre짯cia짯ti짯on and amortization                     159                       130    
Amor짯tiza짯ti짯on of acqui짯red intan짯gi짯ble assets                     823                       479    
Acqui짯si짯ti짯on-rela짯ted costs                     115                       233    
Adjus짯ted EBITDA   $              1,257     $              1,967    
The Com짯pa짯ny pres짯ents 쏛djus짯ted EBITDA as a sup짯ple짯men짯tal mea짯su짯re of its per짯for짯mance. Adjus짯ted EBITDA for the Com짯pa짯ny is deter짯mi짯ned by adjus짯ting GAAP net inco짯me (loss) for inte짯rest expen짯se, other inco짯me (expen짯se), net, inco짯me tax pro짯vi짯si짯on, equi짯ty inco짯me in inves짯tee, stock-based com짯pen짯sa짯ti짯on, depre짯cia짯ti짯on and amor짯tiza짯ti짯on expen짯se (inclu짯ding amor짯tiza짯ti짯on of acqui짯red intan짯gi짯ble assets) and acqui짯si짯ti짯on-rela짯ted cos짯ts. 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.
(3 )   Recon짯ci짯lia짯ti짯on of GAAP Net Cash Pro짯vi짯ded by Ope짯ra짯ting Acti짯vi짯ties to Free Cash Flow
    Three Months Ended
    April 1,
2023
  March 26,
2022
GAAP net cash pro짯vi짯ded by ope짯ra짯ting activities   $ 486     $ 995  
Ope짯ra짯ting cash flow margin %     9 %     17 %
Purcha짯ses of pro짯per짯ty and equipment   $ (158 )   $ (71 )
Free cash flow   $ 328     $ 924  
Free cash flow margin %     6 %     16 %
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, and free cash flow mar짯gin % is free cash flow expres짯sed as a per짯cen짯ta짯ge of the Company셲 net reve짯nue. The Com짯pa짯ny cal짯cu짯la짯tes and com짯mu짯ni짯ca짯tes free cash flow in the finan짯cial ear짯nings press release becau짯se manage짯ment belie짯ves it is of importance to inves짯tors to under짯stand the natu짯re of the짯se cash flows. The Company셲 cal짯cu짯la짯ti짯on of free cash flow may or may not be con짯sis짯tent with the cal짯cu짯la짯ti짯on of this mea짯su짯re by other com짯pa짯nies in the same indus짯try. Inves짯tors should not view free cash flow as an alter짯na짯ti짯ve to GAAP liqui짯di짯ty mea짯su짯res of cash flows from ope짯ra짯ting activities.