AMD Reports Second Quarter 2023 Financial Results

SANTA CLARA, Calif., Aug. 01, 2023 (GLOBE NEWSWIRE) AMD (NASDAQ:AMD) today announ짯ced reve짯nue for the second quar짯ter of 2023 of $5.4 bil짯li짯on, gross mar짯gin of 46%, ope짯ra짯ting loss of $20 mil짯li짯on, net inco짯me of $27 mil짯li짯on and diluted ear짯nings per share of $0.02. On a non-GAAP(*) basis, gross mar짯gin was 50%, ope짯ra짯ting inco짯me was $1.1 bil짯li짯on, net inco짯me was $948 mil짯li짯on and diluted ear짯nings per share was $0.58.

We deli짯ver짯ed strong results in the second quar짯ter as 4th Gen EPYC and Ryzen 7000 pro짯ces짯sors ram짯ped signi짯fi짯cant짯ly, said AMD Chair and CEO Dr. Lisa Su. 쏰ur AI enga짯ge짯ments increased by more than seven times in the quar짯ter as mul짯ti짯ple cus짯to짯mers initia짯ted or expan짯ded pro짯grams sup짯port짯ing future deploy짯ments of Instinct acce짯le짯ra짯tors at sca짯le. We made strong pro짯gress mee짯ting key hard짯ware and soft짯ware mile짯sto짯nes to address the gro짯wing cus짯to짯mer pull for our data cen짯ter AI solu짯ti짯ons and are on-track to launch and ramp pro짯duc짯tion of MI300 acce짯le짯ra짯tors in the fourth quarter.

We are plea짯sed with our second quar짯ter exe짯cu짯ti짯on, said AMD EVP, CFO and Tre짯asurer Jean Hu. 쏬oo짯king to the third quar짯ter, we expect our Data Cen짯ter and Cli짯ent seg짯ment reve짯nues to each grow by a dou짯ble-digit per짯cen짯ta짯ge sequen짯ti짯al짯ly dri짯ven by incre짯asing demand for our EPYC and Ryzen pro짯ces짯sors, par짯ti짯al짯ly off짯set by Gam짯ing and Embedded seg짯ment declines.

GAAP Quar짯ter짯ly Finan짯cial Results

  Q2 2023 Q2 2022 Y/Y Q1 2023 Q/Q
Reve짯nue ($M) $5,359 $6,550 Down 18% $5,353 Flat
Gross pro짯fit ($M) $2,443 $3,028 Down 19% $2,359 Up 4%
Gross mar짯gin 46% 46% Flat 44% Up 2ppts
Ope짯ra짯ting expen짯ses ($M) $2,471 $2,508 Down 1% $2,514 Down 2%
Ope짯ra짯ting inco짯me (loss) ($M) $(20) $526 Down 104% $(145) Up 86%
Ope짯ra짯ting margin 0% 8% Down 8 ppts (3)% Up 3ppts
Net inco짯me (loss) ($M) $27 $447 Down 94% $(139) Up 119%
Ear짯nings (loss) per share $0.02 $0.27 Down 93% $(0.09) Up 122%

Non-GAAP(*) Quar짯ter짯ly Finan짯cial Results

  Q2 2023 Q2 2022 Y/Y Q1 2023 Q/Q
Reve짯nue ($M) $5,359 $6,550 Down 18% $5,353 Flat
Gross pro짯fit ($M) $2,665 $3,538 Down 25% $2,675 Flat
Gross mar짯gin 50% 54% Down 4 ppts 50% Flat
Ope짯ra짯ting expen짯ses ($M) $1,605 $1,562 Up 3% $1,587 Up 1%
Ope짯ra짯ting inco짯me ($M) $1,068 $1,982 Down 46% $1,098 Down 3%
Ope짯ra짯ting margin 20% 30% Down 10 ppts 21% Down 1ppt
Net inco짯me ($M) $948 $1,707 Down 44% $970 Down 2%
Ear짯nings per share $0.58 $1.05 Down 45% $0.60 Down 3%

Quar짯ter짯ly Seg짯ment Summary

  • Data Cen짯ter seg짯ment reve짯nue was $1.3 bil짯li짯on, down 11% year-over-year pri짯ma짯ri짯ly due to lower 3rd Gen EPYC pro짯ces짯sor sales as Enter짯pri짯se demand was soft and Cloud inven짯to짯ry levels were ele짯va짯ted at some customers. 
    • Reve짯nue increased 2% sequen짯ti짯al짯ly, as 4th Gen AMD EPYCCPU reve짯nue near짯ly dou짯bled and EPYC CPU Enter짯pri짯se sales increased, par짯ti짯al짯ly off짯set by a decli짯ne in adap짯ti짯ve Sys짯tem-on-Chip (SoC) data cen짯ter products.
    • The짯re are now more than 670 AMD-powered cloud ins짯tances publicly available.
    • AMD Instinct꽓 MI300A and MI300X GPUs are sam짯pling to lea짯ding HPC, Cloud and AI customers.
  • Cli짯ent seg짯ment reve짯nue was $998 mil짯li짯on, down 54% year-over-year due to redu짯ced pro짯ces짯sor ship짯ments resul짯ting from a wea짯k짯er PC mar짯ket and a signi짯fi짯cant inven짯to짯ry cor짯rec짯tion across the PC sup짯p짯ly chain. 
    • Reve짯nue increased 35% sequen짯ti짯al짯ly as AMD Ryzen꽓 7000 Series CPU sales grew signi짯fi짯cant짯ly, and PC mar짯ket con짯di짯ti짯ons improved.
    • More than 100 AMD-powered com짯mer짯cial PC plat짯forms are set to launch this year.
  • Gam짯ing seg짯ment reve짯nue was $1.6 bil짯li짯on, down 4% year-over-year. Semi-cus짯tom reve짯nue grew year-over-year, which was more than off짯set by lower gam짯ing gra짯phics revenue. 
    • Reve짯nue decli짯ned 10% sequen짯ti짯al짯ly pri짯ma짯ri짯ly due to lower gam짯ing gra짯phics sales.
  • Embedded seg짯ment reve짯nue was $1.5 bil짯li짯on, up 16% year-over-year pri짯ma짯ri짯ly dri짯ven by strength in the Indus짯tri짯al, Visi짯on and Health짯ca짯re, Auto짯mo짯ti짯ve and Test and Emu짯la짯ti짯on markets. 
    • Reve짯nue decreased 7% sequen짯ti짯al짯ly pri짯ma짯ri짯ly dri짯ven by soft짯ness in the Com짯mu짯ni짯ca짯ti짯ons market.
    • The new AMD Ver짯sal꽓 Pre짯mi짯um VP1902 adap짯ti짯ve SoC, Spar짯tan꽓 Ultras짯ca짯le+꽓 FPGAs and enhan짯ced ver짯si짯ons of the Viv짯a짯do꽓 and Vitis꽓 soft짯ware plat짯forms are expan짯ding AMD셲 adap짯ti짯ve com짯pu짯ting pro짯duct leadership.

Recent PR Highlights

  • At the Data Cen짯ter and AI Tech짯no짯lo짯gy Pre짯mier event, AMD announ짯ced the expan짯si짯on of its lea짯der짯ship data cen짯ter port짯fo짯lio and shared details on its next gene짯ra짯ti짯on AMD Instinct acce짯le짯ra짯tor and soft짯ware ena짯blem짯ent for gene짯ra짯ti짯ve AI
    • AMD unvei짯led two new, workload opti짯mi짯zed 4th Gen AMD EPYC pro짯ces짯sors: AMD EPYC 97X4 CPUs, code짯na짯med 쏝er짯ga짯mo, deli짯ver lea짯der짯ship cloud nati짯ve com짯pu짯ting, while 4th Gen AMD EPYC pro짯ces짯sors with AMD 3D V멌ache꽓 tech짯no짯lo짯gy, code짯na짯med 쏥enoa멭, pro짯vi짯de lea짯der짯ship per짯for짯mance for high짯ly deman짯ding tech짯ni짯cal com짯pu짯ting workloads.
    • AMD high짯ligh짯ted its part짯ner짯ship with indus짯try lea짯ders Hug짯ging Face and PyTorch to enable an exten짯si짯ve array of AI models that are opti짯mi짯zed and rea짯dy to use 쐎ut of the box on AMD accelerators.
    • AMD show짯ca짯sed a robust net짯wor짯king port짯fo짯lio, inclu짯ding the next gene짯ra짯ti짯on AMD Pen짯san짯do꽓 DPU, which aims to deli짯ver enhan짯ced per짯for짯mance and power efficiency.
  • AMD con짯ti짯nues to deli짯ver high-per짯for짯mance and acce짯le짯ra짯ted com짯pu짯ting for the data cen짯ter, cloud and supercomputing: 
    • AWS, Ali짯baba, Micro짯soft Azu짯re and OCI announ짯ced new ins짯tances powered by 4th Gen AMD EPYC pro짯ces짯sors. OCI also announ짯ced MyS짯QL Heat짯wa짯ve based on 4th Gen AMD EPYC pro짯ces짯sors, enab짯ling one ser짯vice for tran짯sac짯tion pro짯ces짯sing, real-time data ana짯ly짯tics and machi짯ne lear짯ning across cloud services.
    • SAP sel짯ec짯ted AMD EPYC pro짯ces짯sors to power Rise with SAP appli짯ca짯ti짯ons hos짯ted on Goog짯le Cloud.
    • AMD EPYC pro짯ces짯sors and AMD Instinct acce짯le짯ra짯tors con짯ti짯nue to be the solu짯ti짯ons of choice behind the most inno짯va짯ti짯ve, ener짯gy effi짯ci짯ent and powerful super짯com짯pu짯ters in the world, powe짯ring 121 super짯com짯pu짯ters on the latest Top500 list and seven of the top 10 super짯com짯pu짯ters on the Green500 list.
    • Cere짯bras unvei짯led the Con짯dor Gala짯xy 1 cloud-based AI super짯com짯pu짯ter, enab짯led by more than 70,000 AMD EPYC CPU cores. Initi짯al appli짯ca짯ti짯ons for the sys짯tem include LLM trai짯ning, health짯ca짯re and cli짯ma짯te research.
    • AMD announ짯ced the release of the new AMD ROCm꽓 5.6 open soft짯ware plat짯form, fea짯turing enhan짯ced capa짯bi짯li짯ties for AI and HPC workloads, inclu짯ding new AI soft짯ware add-ons for lar짯ge lan짯guage and other models, per짯for짯mance opti짯miza짯ti짯ons across the ROCm port짯fo짯lio of libra짯ri짯es and addi짯tio짯nal sup짯port for the AI community.
  • AMD embedded pro짯ducts are deli짯ve짯ring opti짯mi짯zed per짯for짯mance across a diver짯se set of markets: 
    • Adop짯ti짯on of AMD embedded pro짯ducts is expan짯ding in enter짯pri짯se sto짯rage, as Hew짯lett Packard Enter짯pri짯se announ짯ced that AMD EPYC Embedded Series pro짯ces짯sors are powe짯ring its new modu짯lar sto짯rage solu짯ti짯on, HPE Alle짯tra Sto짯rage MP.
    • AMD intro짯du짯ced two addi짯ti짯ons to the auto짯mo짯ti짯ve-gra짯de XA Artix꽓 UltraS짯ca짯le+ fami짯ly: XA AU10P and XA AU15P FPGAs, which are opti짯mi짯zed for use in ADAS sen짯sor applications.
  • AMD announ짯ced new Ryzen꽓 PRO 7040 Series Mobi짯le pro짯ces짯sors, the most advan짯ced x86 pro짯ces짯sors for pre짯mi짯um Win짯dows 11 busi짯ness lap짯tops and mobi짯le work짯sta짯tions. AMD also announ짯ced the Ryzen PRO 7000 Series pro짯ces짯sors for desk짯top, brin짯ging the power of 쏾en 4 and AMD RDNA꽓 2 inte짯gra짯ted gra짯phics to pro짯fes짯sio짯nal desk짯top users.
  • New AMD gam짯ing pro짯ducts deli짯ver incre짯di짯ble expe짯ri짯en짯ces on the desk짯top or on the go: 
    • AMD intro짯du짯ced the AMD Ryzen Z1 Series pro짯ces짯sors, the ulti짯ma짯te high-per짯for짯mance pro짯ces짯sor for hand짯held PC gam짯ing con짯so짯les, which power the new Asus ROG Ally.
    • AMD laun짯ched the Rade짯on꽓 RX 7600 gra짯phics card for next-gene짯ra짯ti짯on, high-per짯for짯mance 1080p gam짯ing, strea짯ming and con짯tent crea짯ti짯on with stun짯ning visu짯al fidelity.
  • AMD announ짯ced plans to invest $135 mil짯li짯on to expand adap짯ti짯ve com짯pu짯ting rese짯arch, deve짯lo짯p짯ment and engi짯nee짯ring ope짯ra짯ti짯ons in Ire짯land to fund stra짯te짯gic R&D pro짯jects for next gene짯ra짯ti짯on AI, data cen짯ter, net짯wor짯king and 6G com짯mu짯ni짯ca짯ti짯ons infrastructure.
  • AMD announ짯ced the appoint짯ment of Phil Gui짯do to chief com짯mer짯cial offi짯cer, with respon짯si짯bi짯li짯ty for the AMD world짯wi짯de sales orga짯niza짯ti짯on. Gui짯do joins from IBM whe짯re he most recent짯ly ser짯ved as gene짯ral mana짯ger, glo짯bal mana짯ging part짯ner of Stra짯te짯gic Sales at IBM Con짯sul짯ting. He spent the last 30 years at IBM in a varie짯ty of sales and busi짯ness lea짯der짯ship roles and brings exten짯si짯ve expe짯ri짯ence dri짯ving deep stra짯te짯gic rela짯ti짯onships with data cen짯ter, embedded and com짯mer짯cial customers.

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 third quar짯ter of 2023, AMD expects reve짯nue to be appro짯xi짯m짯ate짯ly $5.7 bil짯li짯on, plus or minus $300 mil짯li짯on, and expects non-GAAP gross mar짯gin to be 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 second 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
    July 1,
2023
  April 1,
2023
  June 25,
2022
GAAP gross profit   $ 2,443     $ 2,359     $ 3,028  
GAAP gross margin     46 %     44 %     46 %
Stock-based com짯pen짯sa짯ti짯on     10       8       8  
Amor짯tiza짯ti짯on of acqui짯si짯ti짯on-rela짯ted intangibles     212       305       407  
Acqui짯si짯ti짯on-rela짯ted and other cos짯ts(1)           3       95  
Non-GAAP gross profit   $ 2,665     $ 2,675     $ 3,538  
Non-GAAP gross margin     50 %     50 %     54 %
             
GAAP ope짯ra짯ting expenses   $ 2,471     $ 2,514     $ 2,508  
GAAP ope짯ra짯ting expenses/revenue %     46 %     47 %     38 %
Stock-based com짯pen짯sa짯ti짯on     338       297       251  
Amor짯tiza짯ti짯on of acqui짯si짯ti짯on-rela짯ted intangibles     481       518       616  
Acqui짯si짯ti짯on-rela짯ted and other cos짯ts(1)     47       112       79  
Non-GAAP ope짯ra짯ting expenses   $ 1,605     $ 1,587     $ 1,562  
Non-GAAP ope짯ra짯ting expenses/revenue %     30 %     30 %     24 %
             
GAAP ope짯ra짯ting inco짯me (loss)   $ (20 )   $ (145 )   $ 526  
GAAP ope짯ra짯ting margin     0 %   (3)%     8 %
Stock-based com짯pen짯sa짯ti짯on     348       305       259  
Amor짯tiza짯ti짯on of acqui짯si짯ti짯on-rela짯ted intangibles     693       823       1,023  
Acqui짯si짯ti짯on-rela짯ted and other cos짯ts(1)     47       115       174  
Non-GAAP ope짯ra짯ting income   $ 1,068     $ 1,098     $ 1,982  
Non-GAAP ope짯ra짯ting margin     20 %     21 %     30 %
             
    Three Months Ended
    July 1,
2023
  April 1,
2023
  June 25,
2022
GAAP net inco짯me (loss) / ear짯nings (loss) per share   $ 27     $ 0.02     $ (139 )   $ (0.09 )   $ 447     $ 0.27  
(Gains) los짯ses on equi짯ty invest짯ments, net     3             (1 )           10        
Stock-based com짯pen짯sa짯ti짯on     348       0.21       305       0.19       259       0.16  
Equi짯ty inco짯me in investee     (6 )           (1 )           (4 )      
Amor짯tiza짯ti짯on of acqui짯si짯ti짯on-rela짯ted intangibles     693       0.42       823       0.51       1,023       0.63  
Acqui짯si짯ti짯on-rela짯ted and other cos짯ts(1)     47       0.03       115       0.07       174       0.11  
Inco짯me tax provision     (164 )     (0.10 )     (132 )     (0.08 )     (202 )     (0.12 )
Non-GAAP net inco짯me / ear짯nings per share   $ 948     $ 0.58     $ 970     $ 0.60     $ 1,707     $ 1.05  
(1)   Acqui짯si짯ti짯on-rela짯ted and other cos짯ts pri짯ma짯ri짯ly com짯pri짯sed of tran짯sac짯tion cos짯ts, purcha짯se pri짯ce adjus짯t짯ments for inven짯to짯ry, cer짯tain com짯pen짯sa짯ti짯on char짯ges, con짯tract ter짯mi짯na짯ti짯on and work짯force reba짯lan짯cing charges.
     

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 the expec짯ted launch and pro짯duc짯tion ramp of AMD Instinct꽓 MI300 acce짯le짯ra짯tors in the fourth quar짯ter 2023; expec짯ted dou짯ble digit reve짯nue growth in AMD셲 Data Cen짯ter and Cli짯ent seg짯ments on a sequen짯ti짯al basis dri짯ven by incre짯asing demand for AMDEPYC꽓 and Ryzen꽓 pro짯ces짯sors, par짯ti짯al짯ly off짯set by Gam짯ing and Embedded seg짯ment decli짯nes; the fea짯tures, func짯tion짯a짯li짯ty, per짯for짯mance, avai짯la짯bi짯li짯ty, timing and expec짯ted bene짯fits of AMD pro짯ducts, and AMD셲 expec짯ted third quar짯ter 2023 finan짯cial out짯look, inclu짯ding reve짯nue and non-GAAP gross mar짯gin, 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 AMD셲 tan짯gi짯ble, defi짯ni짯te-lived or inde짯fi짯ni짯te-lived intan짯gi짯ble assets, inclu짯ding good짯will, on AMD셲 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, as well as the impact of finan짯cial insti짯tu짯ti짯on fail짯ure on AMD셲 cash and cash equi짯va짯lents; poli짯ti짯cal, legal, eco짯no짯mic risks and natu짯ral dis짯as짯ters; future impairm짯ents of 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 and 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 August 1, 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 and other 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, Instinct, Ver짯sal, Artix, Spar짯tan, Ultras짯ca짯le+ and com짯bi짯na짯ti짯ons the짯reof, are trade짯marks of Advan짯ced Micro Devices, Inc.

 
ADVANCED MICRO DEVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Mil짯li짯ons except per share amounts and per짯cen짯ta짯ges) (Unau짯di짯ted)
         
    Three Months Ended   Six Months Ended
    July 1,
2023
  April 1,
2023
  June 25,
2022
  July 1,
2023
  June 25,
2022
Net reve짯nue   $ 5,359     $ 5,353     $ 6,550     $ 10,712     $ 12,437  
Cost of sales     2,704       2,689       3,115       5,393       5,998  
Amor짯tiza짯ti짯on of acqui짯si짯ti짯on-rela짯ted intangibles     212       305       407       517       593  
Total cost of sales     2,916       2,994       3,522       5,910       6,591  
Gross pro짯fit     2,443       2,359       3,028       4,802       5,846  
Gross mar짯gin     46 %     44 %     46 %     45 %     47 %
Rese짯arch and development     1,443       1,411       1,300       2,854       2,360  
Mar짯ke짯ting, gene짯ral and administrative     547       585       592       1,132       1,189  
Amor짯tiza짯ti짯on of acqui짯si짯ti짯on-rela짯ted intangibles     481       518       616       999       909  
Licen짯sing gain     (8 )     (10 )     (6 )     (18 )     (89 )
Ope짯ra짯ting inco짯me (loss)     (20 )     (145 )     526       (165 )     1,477  
Inte짯rest expense     (28 )     (25 )     (25 )     (53 )     (38 )
Other inco짯me (expen짯se), net     46       43       (4 )     89       (46 )
Inco짯me (loss) befo짯re inco짯me taxes and equi짯ty income     (2 )     (127 )     497       (129 )     1,393  
Inco짯me tax pro짯vi짯si짯on (bene짯fit)     (23 )     13       54       (10 )     167  
Equi짯ty inco짯me in investee     6       1       4       7       7  
Net inco짯me (loss)   $ 27     $ (139 )   $ 447     $ (112 )   $ 1,233  
Ear짯nings (loss) per share                    
Basic   $ 0.02     $ (0.09 )   $ 0.28     $ (0.07 )   $ 0.82  
Diluted   $ 0.02     $ (0.09 )   $ 0.27     $ (0.07 )   $ 0.81  
Shares used in per share calculation                    
Basic     1,612       1,611       1,618       1,612       1,506  
Diluted     1,627       1,611       1,632       1,612       1,521  
                                         
 
ADVANCED MICRO DEVICES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Mil짯li짯ons)
         
    July 1,
2023
  Decem짯ber 31,
2022
    (Unau짯di짯ted)    
ASSETS        
Cur짯rent assets:        
Cash and cash equivalents   $ 3,841     $ 4,835  
Short-term invest짯ments     2,444       1,020  
Accounts receiva짯ble, net     4,312       4,126  
Invent짯ories     4,567       3,771  
Receiv짯a짯bles from rela짯ted parties     2       2  
Pre짯paid expen짯ses and other cur짯rent assets     1,339       1,265  
Total cur짯rent assets     16,505       15,019  
Pro짯per짯ty and equip짯ment, net     1,541       1,513  
Ope짯ra짯ting lea짯se right-of-use assets     461       460  
Good짯will     24,177       24,177  
Acqui짯si짯ti짯on-rela짯ted intan짯gi짯bles, net     22,598       24,118  
Invest짯ment: equi짯ty method     90       83  
Defer짯red tax assets     68       58  
Other non-cur짯rent assets     2,527       2,152  
Total Assets   $ 67,967     $ 67,580  
         
LIABILITIES AND STOCKHOLDERS EQUITY        
Cur짯rent liabilities:        
Accounts paya짯ble   $ 2,779     $ 2,493  
Paya짯bles to rela짯ted parties     313       463  
Accrued lia짯bi짯li짯ties     2,971       3,077  
Cur짯rent por짯ti짯on of long-term debt, net     753        
Other cur짯rent liabilities     756       336  
Total cur짯rent liabilities     7,572       6,369  
Long-term debt, net of cur짯rent portion     1,714       2,467  
Long-term ope짯ra짯ting lea짯se liabilities     393       396  
Defer짯red tax liabilities     1,365       1,934  
Other long-term liabilities     1,787       1,664  
         
Stock짯hol짯ders equity:        
Capi짯tal stock:        
Com짯mon stock, par value     16       16  
Addi짯tio짯nal paid-in capital     58,825       58,005  
Tre짯asu짯ry stock, at cost     (3,430 )     (3,099 )
Accu짯mu짯la짯ted deficit     (243 )     (131 )
Accu짯mu짯la짯ted other com짯pre짯hen짯si짯ve loss     (32 )     (41 )
Total stock짯hol짯ders equity   $ 55,136     $ 54,750  
Total Lia짯bi짯li짯ties and Stock짯hol짯ders Equity   $ 67,967     $ 67,580  
                 
 
ADVANCED MICRO DEVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Mil짯li짯ons) (Unau짯di짯ted)
         
    Three Months Ended   Six Months Ended
    July 1,
2023
  June 25,
2022
  July 1,
2023
  June 25,
2022
Cash flows from ope짯ra짯ting activities:                
Net inco짯me (loss)   27     447     (112 )   1,233  
Adjus짯t짯ments to recon짯ci짯le net inco짯me (loss) to net cash pro짯vi짯ded by ope짯ra짯ting activities:                
Depre짯cia짯ti짯on and amortization   849     1,180     1,831     1,789  
Stock-based com짯pen짯sa짯ti짯on   348     292     657     491  
Amor짯tiza짯ti짯on of ope짯ra짯ting lea짯se right-of-use assets   24     21     48     40  
Amor짯tiza짯ti짯on of inven짯to짯ry fair value adjustment   1     96     3     185  
Loss on sale or dis짯po짯sal of pro짯per짯ty and equipment   1         7     15  
Defer짯red inco짯me taxes   (274 )   (276 )   (582 )   (618 )
(Gains) los짯ses on equi짯ty invest짯ments, net   3     10     2     54  
Other   (18 )   (2 )   (20 )   (4 )
Chan짯ges in ope짯ra짯ting assets and liabilities                
Accounts receiva짯ble, net   (272 )   (344 )   (186 )   (1,016 )
Invent짯ories   (332 )   (248 )   (796 )   (274 )
Receiv짯a짯bles from rela짯ted parties               (1 )
Pre짯paid expen짯ses and other assets   (46 )   23     (237 )   (237 )
Paya짯bles to rela짯ted parties   (41 )   156     (150 )   277  
Accounts paya짯ble   236     24     309     28  
Accrued and other liabilities   (127 )   (341 )   91     71  
Net cash pro짯vi짯ded by ope짯ra짯ting activities   379     1,038     865     2,033  
Cash flows from inves짯t짯ing activities:                
Purcha짯ses of pro짯per짯ty and equipment   (125 )   (132 )   (283 )   (203 )
Purcha짯ses of short-term investments   (1,113 )   (520 )   (2,816 )   (620 )
Pro짯ceeds from matu짯ri짯ty of short-term investments   698     1,285     1,171     2,248  
Pro짯ceeds from sale of short-term investments   103         248     1  
Cash recei짯ved from acqui짯si짯ti짯on of Xilinx               2,366  
Acqui짯si짯ti짯on of Pen짯san짯do, net of cash acquired       (1,558 )       (1,558 )
Other   (1 )   (3 )   5     (4 )
Net cash pro짯vi짯ded by (used in) inves짯t짯ing activities   (438 )   (928 )   (1,675 )   2,230  
Cash flows from finan짯cing activities:                
Pro짯ceeds from debt, net of issu짯an짯ce costs       991         991  
Pro짯ceeds from sales of com짯mon stock through employee equi짯ty plans   141     76     144     78  
Repurcha짯ses of com짯mon stock       (921 )   (241 )   (2,835 )
Com짯mon stock repurcha짯ses for tax with짯hol짯ding on employee equi짯ty plans   (66 )   (31 )   (87 )   (66 )
Other       (1 )       (2 )
Net cash pro짯vi짯ded by (used in) finan짯cing activities   75     114     (184 )   (1,834 )
Net increase (decrease) in cash and cash equivalents   16     224     (994 )   2,429  
Cash and cash equi짯va짯lents at begin짯ning of period   3,825     4,740     4,835     2,535  
Cash and cash equi짯va짯lents at end of period   3,841     4,964     3,841     4,964  
                         
 
SELECTED CORPORATE DATA
(Mil짯li짯ons) (Unau짯di짯ted)
         
    Three Months Ended   Six Months Ended
    July 1,
2023
  April 1,
2023
  June 25,
2022
  July 1,
2023
  June 25,
2022
Seg짯ment and Cate짯go짯ry Infor짯ma짯ti짯on(1)                    
Data Cen짯ter                    
Net reve짯nue   $ 1,321     $ 1,295     $ 1,486     $ 2,616     $ 2,779  
Ope짯ra짯ting income   $ 147     $ 148     $ 472     $ 295     $ 899  
Cli짯ent                    
Net reve짯nue   $ 998     $ 739     $ 2,152     $ 1,737     $ 4,276  
Ope짯ra짯ting inco짯me (loss)   $ (69 )   $ (172 )   $ 676     $ (241 )   $ 1,368  
Gam짯ing                    
Net reve짯nue   $ 1,581     $ 1,757     $ 1,655     $ 3,338     $ 3,530  
Ope짯ra짯ting income   $ 225     $ 314     $ 187     $ 539     $ 545  
Embedded                    
Net reve짯nue   $ 1,459     $ 1,562     $ 1,257     $ 3,021     $ 1,852  
Ope짯ra짯ting income   $ 757     $ 798     $ 641     $ 1,555     $ 918  
All Other                    
Net reve짯nue   $     $     $     $     $  
Ope짯ra짯ting loss   $ (1,080 )   $ (1,233 )   $ (1,450 )   $ (2,313 )   $ (2,253 )
Total                    
Net reve짯nue   $ 5,359     $ 5,353     $ 6,550     $ 10,712     $ 12,437  
Ope짯ra짯ting inco짯me (loss)   $ (20 )   $ (145 )   $ 526     $ (165 )   $ 1,477  
                     
Other Data                    
Capi짯tal expenditures   $ 125     $ 158     $ 132     $ 283     $ 203  
Adjus짯ted EBITDA(2)   $ 1,224     $ 1,257     $ 2,139     $ 2,481     $ 4,106  
Cash, cash equi짯va짯lents and short-term investments   $ 6,285     $ 5,939     $ 5,992     $ 6,285     $ 5,992  
Free cash flow(3)   $ 254     $ 328     $ 906     $ 582     $ 1,830  
Total assets   $ 67,967     $ 67,634     $ 67,502     $ 67,967     $ 67,502  
Total debt   $ 2,467     $ 2,467     $ 2,777     $ 2,467     $ 2,777  
(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 and other cos짯ts, and licen짯sing gain.
(2)   Recon짯ci짯lia짯ti짯on of GAAP Net Inco짯me (Loss) to Adjus짯ted EBITDA
    Three Months Ended   Six Months Ended
    July 1,
2023
  April 1,
2023
  June 25,
2022
  July 1,
2023
  June 25,
2022
GAAP net inco짯me (loss)   $ 27     $ (139 )   $ 447     $ (112 )   $ 1,233  
Inte짯rest expense     28       25       25       53       38  
Other (inco짯me) expen짯se, net     (46 )     (43 )     4       (89 )     46  
Inco짯me tax pro짯vi짯si짯on (bene짯fit)     (23 )     13       54       (10 )     167  
Equi짯ty inco짯me in investee     (6 )     (1 )     (4 )     (7 )     (7 )
Stock-based com짯pen짯sa짯ti짯on     348       305       259       653       433  
Depre짯cia짯ti짯on and amortization     156       159       157       315       287  
Amor짯tiza짯ti짯on of acqui짯si짯ti짯on-rela짯ted intangibles     693       823       1,023       1,516       1,502  
Acqui짯si짯ti짯on-rela짯ted and other costs     47       115       174       162       407  
Adjus짯ted EBITDA   $ 1,224     $ 1,257     $ 2,139     $ 2,481     $ 4,106  
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 (bene짯fit), equi짯ty inco짯me in inves짯tee, stock-based com짯pen짯sa짯ti짯on, depre짯cia짯ti짯on and amor짯tiza짯ti짯on expen짯se (inclu짯ding amor짯tiza짯ti짯on of acqui짯si짯ti짯on-rela짯ted intan짯gi짯bles), acqui짯si짯ti짯on-rela짯ted and other 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   Six Months Ended
    July 1,
2023
  April 1,
2023
  June 25,
2022
  July 1,
2023
  June 25,
2022
GAAP net cash pro짯vi짯ded by ope짯ra짯ting activities   $ 379     $ 486     $ 1,038     $ 865     $ 2,033  
Ope짯ra짯ting cash flow margin %     7 %     9 %     16 %     8 %     16 %
Purcha짯ses of pro짯per짯ty and equipment   $ (125 )   $ (158 )   $ (132 )   $ (283 )   $ (203 )
Free cash flow   $ 254     $ 328     $ 906     $ 582     $ 1,830  
Free cash flow margin %     5 %     6 %     14 %     5 %     15 %
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.