AMD Reports Fourth Quarter and Full Year 2023 Financial Results

SANTA CLARA, Calif., Jan. 30, 2024 (GLOBE NEWSWIRE) — AMD (NASDAQ:AMD) today announ­ced reve­nue for the fourth quar­ter of 2023 of $6.2 bil­li­on, gross mar­gin of 47%, ope­ra­ting inco­me of $342 mil­li­on, net inco­me of $667 mil­li­on and diluted ear­nings per share of $0.41. On a non-GAAP(*) basis, gross mar­gin was 51%, ope­ra­ting inco­me was $1.4 bil­li­on, net inco­me was $1.2 bil­li­on and diluted ear­nings per share was $0.77.

For the full year 2023, the com­pa­ny repor­ted reve­nue of $22.7 bil­li­on, gross mar­gin of 46%, ope­ra­ting inco­me of $401 mil­li­on, net inco­me of $854 mil­li­on and diluted ear­nings per share of $0.53. On a non-GAAP(*) basis, gross mar­gin was 50%, ope­ra­ting inco­me was $4.9 bil­li­on, net inco­me was $4.3 bil­li­on and diluted ear­nings per share was $2.65.

We finis­hed 2023 strong, with sequen­ti­al and year-over-year reve­nue and ear­nings growth dri­ven by record quar­ter­ly AMD Instinct GPU and EPYC CPU sales and hig­her AMD Ryzen pro­ces­sor sales,” said AMD Chair and CEO Dr. Lisa Su. “Demand for our high-per­for­mance data cen­ter pro­duct port­fo­lio con­ti­nues to acce­le­ra­te, posi­tio­ning us well to deli­ver strong annu­al growth in what is an incre­di­bly exci­ting time as AI re-shapes vir­tual­ly every part of the com­pu­ting market.”

 “AMD exe­cu­ted well in 2023 despi­te a mixed demand envi­ron­ment,” said AMD EVP, CFO and Tre­asurer Jean Hu. “We dro­ve year-over-year reve­nue growth in our Data Cen­ter and Embedded seg­ments and suc­cessful­ly laun­ched our AMD Instinct MI300 GPUs posi­tio­ning us for a strong pro­duct ramp in 2024.”

GAAP Quar­ter­ly Finan­cial Results
 
  Q4 2023 Q4 2022 Y/Y Q3 2023 Q/Q
Reve­nue ($M) $6,168 $5,599 Up 10% $5,800 Up 6%
Gross pro­fit ($M) $2,911 $2,403 Up 21% $2,747 Up 6%
Gross mar­gin 47% 43% Up 4 ppts 47% Flat
Ope­ra­ting expen­ses ($M) $2,575 $2,557 Flat $2,533 Up 2%
Ope­ra­ting inco­me (loss) ($M) $342 $(149) Up 330% $224 Up 53%
Ope­ra­ting margin 6% (3%) Up 9 ppts 4% Up 2 ppts
Net inco­me ($M) $667 $21 Up 3,076% $299 Up 123%
Diluted ear­nings per share $0.41 $0.01 Up 4,000% $0.18 Up 128%
           

 

Non-GAAP(*) Quar­ter­ly Finan­cial Results
 
  Q4 2023 Q4 2022 Y/Y Q3 2023 Q/Q
Reve­nue ($M) $6,168 $5,599 Up 10% $5,800 Up 6%
Gross pro­fit ($M) $3,133 $2,859 Up 10% $2,963 Up 6%
Gross mar­gin 51% 51% Flat 51% Flat
Ope­ra­ting expen­ses ($M) $1,727 $1,602 Up 8% $1,697 Up 2%
Ope­ra­ting inco­me ($M) $1,412 $1,262 Up 12% $1,276 Up 11%
Ope­ra­ting margin 23% 23% Flat 22% Up 1 ppt
Net inco­me ($M) $1,249 $1,113 Up 12% $1,135 Up 10%
Diluted ear­nings per share $0.77 $0.69 Up 12% $0.70 Up 10%
           

 

Annu­al Finan­cial Results
 
  GAAP Non-GAAP(*)
  2023 2022 Y/Y 2023 2022 Y/Y
Reve­nue ($M) $22,680 $23,601 Down 4% $22,680 $23,601 Down 4%
Gross pro­fit ($M) $10,460 $10,603 Down 1% $11,436 $12,273 Down 7%
Gross mar­gin % 46% 45% Up 1 ppt 50% 52% Down 2 ppts
Ope­ra­ting expen­ses ($M) $10,093 $9,441 Up 7% $6,616 $6,030 Up 10%
Ope­ra­ting inco­me ($M) $401 $1,264 Down 68% $4,854 $6,345 Down 23%
Ope­ra­ting margin % 2% 5% Down 3 ppts 21% 27% Down 6 ppts
Net inco­me ($M) $854 $1,320 Down 35% $4,302 $5,504 Down 22%
Diluted ear­nings per share $0.53 $0.84 Down 37% $2.65 $3.50 Down 24%
             

Seg­ment Summary

  • Data Cen­ter seg­ment reve­nue in the quar­ter was $2.3 bil­li­on, up 38% year-over-year and 43% sequen­ti­al­ly dri­ven by strong growth in AMD Instinct™ GPUs and 4th Gen AMD EPYC™ CPUs. 
    • For 2023, Data Cen­ter seg­ment reve­nue was $6.5 bil­li­on, an increase of 7% com­pared to the pri­or year, dri­ven by strong growth in AMD Instinct GPUs and 4th Gen AMD EPYC CPUs.
  • Cli­ent seg­ment reve­nue was $1.5 bil­li­on, up 62% year-over-year dri­ven pri­ma­ri­ly by an increase in AMD Ryzen™ 7000 Series CPU sales. 
    • For 2023, Cli­ent seg­ment reve­nue was $4.7 bil­li­on, down 25% com­pared to the pri­or year, due to a decli­ne in the PC market.
  • Gam­ing seg­ment reve­nue was $1.4 bil­li­on, down 17% year-over-year and 9% sequen­ti­al­ly, due to a decrease in semi-cus­tom reve­nue, par­ti­al­ly off­set by an increase in AMD Rade­on™ GPU sales. 
    • For 2023, Gam­ing seg­ment reve­nue was $6.2 bil­li­on, down 9% com­pared to the pri­or year pri­ma­ri­ly due to lower semi-cus­tom sales.
  • Embedded seg­ment reve­nue was $1.1 bil­li­on, down 24% year-over-year and 15% sequen­ti­al­ly pri­ma­ri­ly due to cus­to­mers redu­cing their inven­to­ry levels. 
    • For 2023, Embedded seg­ment reve­nue was $5.3 bil­li­on, up 17% com­pared to the pri­or year, pri­ma­ri­ly due to the inclu­si­on of a full year of reve­nue rela­ted to the acqui­si­ti­on of Xilinx com­ple­ted in Febru­ary 2022.

Recent PR Highlights

  • AMD show­ca­sed gro­wing momen­tum for advan­ced AMD tech­no­lo­gy-powered AI solu­ti­ons from the data cen­ter to PCs: 
    • AMD announ­ced the gene­ral avai­la­bi­li­ty of AMD Instinct MI300X acce­le­ra­tors – with indus­try lea­ding memo­ry band­width per­for­mance for gene­ra­ti­ve AI – as well as the AMD Instinct MI300A APU that com­bi­nes AMD CDNA™ 3 and “Zen 4” chip­lets to deli­ver breakth­rough per­for­mance for HPC and AI workloads.
    • At the “Advan­cing AI” event, Micro­soft, Meta, Ora­cle, Dell Tech­no­lo­gies, HPE, Leno­vo, Super­mi­cro, Aris­ta, Broad­com and Cis­co show­ca­sed how they are lever­aging AMD Instinct MI300X acce­le­ra­tors to power cloud and enter­pri­se AI infrastructure.
    • AMD made signi­fi­cant pro­gress expan­ding its AI soft­ware eco­sys­tem, inclu­ding unvei­ling the latest ver­si­on of its open-source ROCm™ 6, soft­ware stack opti­mi­zed for gene­ra­ti­ve AI. AI eco­sys­tem lea­ders inclu­ding Dat­ab­ricks, Essen­ti­al AI, Lami­ni and Ope­nAI are lever­aging AMD Instinct acce­le­ra­tors to deli­ver dif­fe­ren­tia­ted AI solu­ti­ons. AMD also exten­ded sup­port for ROCm soft­ware to include the AMD Rade­on RX 7900 XT GPU, pro­vi­ding even more opti­ons for AI deve­lo­pers and rese­ar­chers to use AMD hard­ware for their AI work.
    • AMD announ­ced AMD Ryzen 8040 Series mobi­le pro­ces­sors with an inte­gra­ted neu­ral pro­ces­sing unit (NPU) on sel­ect models for AI. In 2022, AMD was the first com­pa­ny to intro­du­ce an x86 pro­ces­sor with an on-chip NPU to acce­le­ra­te AI workloads with the AMD Ryzen 7040 series mobi­le pro­ces­sors. The updated NPU in the AMD Ryzen 8040 series deli­vers up to 1.6x more AI pro­ces­sing per­for­mance com­pared to AMD Ryzen 7040 Series mobi­le pro­ces­sors. Acer, ASUS, Leno­vo, Razer and other PC OEMs intro­du­ced new lap­tops fea­turing AMD Ryzen 8040 Series pro­ces­sors, with the first sys­tems on-track to go on sale this quarter.
    • At CES 2024, AMD announ­ced the AMD Ryzen 8000G Series desk­top pro­ces­sors that are the first desk­top PC pro­ces­sors in the indus­try to include a dedi­ca­ted AI NPU to power AI capa­bi­li­ties on the PC.
    • At Micro­soft Igni­te, AMD and Micro­soft high­ligh­ted how AMD Instinct MI300X acce­le­ra­tors, AMD EPYC CPUs and AMD Ryzen CPUs with AI engi­nes are enab­ling new ser­vices and com­pu­te capa­bi­li­ties across cloud and gene­ra­ti­ve AI, con­fi­den­ti­al com­pu­ting, cloud com­pu­ting and AI-capa­ble PCs.
  • AMD show­ca­sed con­tin­ued lea­der­ship in supercomputing: 
    • Eni announ­ced a new super­com­pu­ter, HPC6, powered by AMD EPYC CPUs and AMD Instinct GPUs. When com­ple­ted, the HPC6 sys­tem will be one of the world’s most powerful super­com­pu­ters dedi­ca­ted to indus­tri­al applications.
    • AMD EPYC pro­ces­sors and AMD Instinct acce­le­ra­tors now power 140 super­com­pu­ters on the latest Top500 list of the world’s fas­test com­pu­ters and eight of the top 10 most ener­gy effi­ci­ent super­com­pu­ters in the world based on the latest Green500 list. The Fron­tier super­com­pu­ter powered by AMD EPYC and AMD Instinct pro­ces­sors remains the fas­test super­com­pu­ter in the world.
  • AMD exten­ded its 3rd Gen AMD EPYC pro­ces­sor lin­e­up with six new CPUs that deli­ver excel­lent value, per­for­mance, ener­gy effi­ci­en­cy and secu­ri­ty fea­tures for main­stream applications.
  • AMD intro­du­ced the AMD Rade­on RX 7600 XT GPU, a high-per­for­mance gra­phics card desi­gned to deli­ver immersi­ve 1080P gam­ing experiences.
  • AMD intro­du­ced the AMD Ver­sal™ AI Edge XA Series and AMD Ryzen Embedded V2000A devices desi­gned for auto­mo­ti­ve focus seg­ments inclu­ding info­tain­ment, advan­ced dri­ver safe­ty and auto­no­mous driving.
  • AMD announ­ced the AMD Ryzen Embedded 7000 Series pro­ces­sors, deli­ve­ring lea­der­ship per­for­mance and advan­ced fea­tures for indus­tri­al and edge solu­ti­ons. The launch was sup­port­ed by a gro­wing part­ner eco­sys­tem, inclu­ding inte­gra­ted solu­ti­ons from Advan­tech, ASRock and DFI.

Cur­rent Outlook

AMD’s out­look state­ments are based on cur­rent expec­ta­ti­ons. The fol­lo­wing state­ments are for­ward-loo­king and actu­al results could dif­fer mate­ri­al­ly depen­ding on mar­ket con­di­ti­ons and the fac­tors set forth under “Cau­tio­na­ry State­ment” below.

For the first quar­ter of 2024, AMD expects reve­nue to be appro­xi­m­ate­ly $5.4 bil­li­on, plus or minus $300 mil­li­on. Sequen­ti­al­ly, AMD expects Data Cen­ter seg­ment reve­nue to be flat, with a sea­so­nal decli­ne in ser­ver sales off­set by a strong Data Cen­ter GPU ramp. Cli­ent, Embedded and Gam­ing seg­ment sales are expec­ted to decli­ne sequen­ti­al­ly, with semi-cus­tom reve­nue expec­ted to decli­ne by a signi­fi­cant dou­ble-digit per­cen­ta­ge. Non-GAAP gross mar­gin is expec­ted to be appro­xi­m­ate­ly 52%.

AMD Tele­con­fe­rence

AMD will hold a con­fe­rence call for the finan­cial com­mu­ni­ty at 2:00 p.m. PT (5:00 p.m. ET) today to dis­cuss its fourth quar­ter and full-year 2023 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.

 

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES      
(in mil­li­ons, except per share data) (Unau­di­ted)        
  Three Months Ended   Year Ended
  Decem­ber 30, 
2023
  Sep­tem­ber 30, 
2023
  Decem­ber 31, 
2022
  Decem­ber 30, 
2023
  Decem­ber 31, 
2022
GAAP gross profit $ 2,911     $ 2,747     $ 2,403     $ 10,460     $ 10,603  
GAAP gross margin   47 %     47 %     43 %     46 %     45 %
Stock-based com­pen­sa­ti­on   6       6       9       30       29  
Amor­tiza­ti­on of acqui­si­ti­on-rela­ted intangibles   215       210       443       942       1,448  
Acqui­si­ti­on-rela­ted and other cos­ts(1)   1             4       4       193  
Non-GAAP gross profit $ 3,133     $ 2,963     $ 2,859     $ 11,436     $ 12,273  
Non-GAAP gross margin   51 %     51 %     51 %     50 %     52 %
                   
GAAP ope­ra­ting expenses $ 2,575     $ 2,533     $ 2,557     $ 10,093     $ 9,441  
GAAP ope­ra­ting expenses/revenue %   42 %     44 %     46 %     45 %     40 %
Stock-based com­pen­sa­ti­on   368       347       301       1,350       983  
Amor­tiza­ti­on of acqui­si­ti­on-rela­ted intangibles   420       450       601       1,869       2,100  
Acqui­si­ti­on-rela­ted and other cos­ts(1)   60       39       53       258       328  
Non-GAAP ope­ra­ting expenses $ 1,727     $ 1,697     $ 1,602     $ 6,616     $ 6,030  
Non-GAAP ope­ra­ting expenses/revenue %   28 %     29 %     29 %     29 %     26 %
                   
GAAP ope­ra­ting inco­me (loss) $ 342     $ 224     $ (149 )   $ 401     $ 1,264  
GAAP ope­ra­ting margin   6 %     4 %   (3)%     2 %     5 %
Stock-based com­pen­sa­ti­on   374       353       310       1,380       1,012  
Amor­tiza­ti­on of acqui­si­ti­on-rela­ted intangibles   635       660       1,044       2,811       3,548  
Acqui­si­ti­on-rela­ted and other cos­ts(1)   61       39       57       262       521  
Non-GAAP ope­ra­ting income $ 1,412     $ 1,276     $ 1,262     $ 4,854     $ 6,345  
Non-GAAP ope­ra­ting margin   23 %     22 %     23 %     21 %     27 %
                                       

 

  Three Months Ended Year Ended
  Decem­ber 30, 
2023
  Sep­tem­ber 30,
2023
  Decem­ber 31, 
2022
  Decem­ber 30, 
2023
  Decem­ber 31, 
2022
GAAP net inco­me / ear­nings per share $ 667     $ 0.41     $ 299     $ 0.18     $ 21     $ 0.01     $ 854     $ 0.53     $ 1,320     $ 0.84  
(Gains) los­ses on equi­ty invest­ments, net   1             (4 )           5             (1 )           62       0.04  
Stock-based com­pen­sa­ti­on   374       0.23       353       0.22       310       0.19       1,380       0.85       1,012       0.64  
Equi­ty inco­me in investee   (6 )           (3 )           (3 )           (16 )     (0.01 )     (14 )     (0.01 )
Amor­tiza­ti­on of acqui­si­ti­on-rela­ted intangibles   635       0.39       660       0.41       1,044       0.65       2,811       1.73       3,548       2.26  
Acqui­si­ti­on-rela­ted and other cos­ts(1)   61       0.04       39       0.02       57       0.04       262       0.16       521       0.33  
Inco­me tax provision   (483 )     (0.30 )     (209 )     (0.13 )     (321 )     (0.20 )     (988 )     (0.61 )     (945 )     (0.60 )
Non-GAAP net inco­me / ear­nings per share $ 1,249     $ 0.77     $ 1,135     $ 0.70     $ 1,113     $ 0.69     $ 4,302     $ 2.65     $ 5,504     $ 3.50  

 

(1) Acqui­si­ti­on-rela­ted and other cos­ts pri­ma­ri­ly com­pri­sed of tran­sac­tion cos­ts, purcha­se pri­ce adjus­t­ments for inven­to­ry, cer­tain com­pen­sa­ti­on char­ges, con­tract ter­mi­na­ti­on and work­force reba­lan­cing charges.
   

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 X pages.

Cau­tio­na­ry Statement

This press release con­ta­ins for­ward-loo­king state­ments con­cer­ning Advan­ced Micro Devices, Inc. (AMD) such as AMD’s expec­ta­ti­ons regar­ding the demand for its high-per­for­mance data cen­ter pro­duct port­fo­lio and AMD’s abili­ty to deli­ver strong annu­al growth in 2024; expec­ted future AI tech­no­lo­gy trends and deve­lo­p­ments; expec­ted AMD Instinct™ MI 300 GPU demand and pro­duct ramp in 2024; the fea­tures, func­tion­a­li­ty, per­for­mance, avai­la­bi­li­ty, timing and expec­ted bene­fits of AMD pro­ducts; and AMD’s expec­ted first quar­ter 2024 finan­cial out­look, inclu­ding reve­nue and non-GAAP gross mar­gin and expec­ted dri­vers based on cur­rent expec­ta­ti­ons, 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; eco­no­mic uncer­tain­ty; cycli­cal natu­re of the semi­con­duc­tor indus­try; mar­ket con­di­ti­ons of the indus­tries in which AMD pro­ducts are sold; 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; 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 ope­ra­ting AMD’s new­ly upgraded 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, memo­ry 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 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 on AMD’s busi­ness and AMD’s abili­ty to inte­gra­te acqui­red busi­nesses;  impact of any impair­ment of the com­bi­ned company’s assets; 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 and eco­no­mic risks and natu­ral dis­as­ters; future impairm­ents of tech­no­lo­gy licen­se purcha­ses; AMD’s abili­ty to attract and retain qua­li­fied per­son­nel; and AMD’s stock pri­ce vola­ti­li­ty. 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 ear­nings press release, in addi­ti­on to GAAP finan­cial results, AMD has pro­vi­ded non-GAAP finan­cial mea­su­res inclu­ding non-GAAP gross pro­fit, non-GAAP ope­ra­ting expen­ses, non-GAAP ope­ra­ting inco­me, non-GAAP net inco­me, non-GAAP diluted ear­nings per share. 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 2023, AMD used a non-GAAP tax rate of 13%, which excludes the tax impact of pre-tax non-GAAP adjus­t­ments. AMD also pro­vi­ded adjus­ted EBITDA and free cash flow as sup­ple­men­tal non-GAAP mea­su­res of its per­for­mance. The­se items are defi­ned in the foot­no­tes to the sel­ec­ted cor­po­ra­te data tables pro­vi­ded at the end of this ear­nings press release. AMD is pro­vi­ding the­se 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 and for the other reasons descri­bed in the foot­no­tes to the sel­ec­ted data tables. The non-GAAP finan­cial mea­su­res dis­c­lo­sed in this ear­nings press release should be view­ed in addi­ti­on to and not as a sub­sti­tu­te for or supe­ri­or to AMD’s repor­ted results pre­pared in accordance with GAAP and should be read only in con­junc­tion with AMD’s Con­so­li­da­ted Finan­cial State­ments pre­pared in accordance with GAAP. The­se non-GAAP finan­cial mea­su­res refe­ren­ced are recon­ci­led to their most direct­ly com­pa­ra­ble GAAP finan­cial mea­su­res in the data tables in this ear­nings press release. This ear­nings press release also con­ta­ins for­ward-loo­king non-GAAP gross mar­gin con­cer­ning AMD’s finan­cial out­look, which is based on cur­rent expec­ta­ti­ons as of Janu­ary 30, 2024, and assump­ti­ons and beliefs that invol­ve num­e­rous risks and uncer­tain­ties. Adjus­t­ments to arri­ve at the GAAP gross mar­gin out­look typi­cal­ly include stock-based com­pen­sa­ti­on, amor­tiza­ti­on of acqui­red intan­gi­ble assets and acqui­si­ti­on-rela­ted and other cos­ts. The timing and impact of such adjus­t­ments are depen­dent on future events that are typi­cal­ly uncer­tain or out­side of AMD’s con­trol, the­r­e­fo­re, a recon­ci­lia­ti­on to equi­va­lent GAAP mea­su­res is not prac­ti­ca­ble at this time. AMD under­ta­kes no intent or obli­ga­ti­on to publicly update or revi­se its out­look state­ments as a result of new infor­ma­ti­on, future events or other­wi­se, except as may be requi­red by law.
     

AMD, the AMD Arrow logo, EPYC, Rade­on, Ryzen, Instinct, Ver­sal, Alveo, Kria, Fide­li­ty­FX, 3D V‑Cache, Ultras­ca­le+, Zynq, Thre­ad­rip­per and com­bi­na­ti­ons the­reof, are trade­marks of Advan­ced Micro Devices, Inc.

 

ADVANCED MICRO DEVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Mil­li­ons except per share amounts and per­cen­ta­ges) (Unau­di­ted)

  Three Months Ended   Year Ended
  Decem­ber 30,
2023
  Sep­tem­ber 30,
2023
  Decem­ber 31,
2022
  Decem­ber 30,
2023
  Decem­ber 31,
2022
Net reve­nue $ 6,168     $ 5,800     $ 5,599     $ 22,680     $ 23,601  
Cost of sales   3,042       2,843       2,753       11,278       11,550  
Amor­tiza­ti­on of acqui­si­ti­on-rela­ted intangibles   215       210       443       942       1,448  
Total cost of sales   3,257       3,053       3,196       12,220       12,998  
Gross pro­fit   2,911       2,747       2,403       10,460       10,603  
Gross mar­gin   47 %     47 %     43 %     46 %     45 %
Rese­arch and development   1,511       1,507       1,366       5,872       5,005  
Mar­ke­ting, gene­ral and administrative   644       576       590       2,352       2,336  
Amor­tiza­ti­on of acqui­si­ti­on-rela­ted intangibles   420       450       601       1,869       2,100  
Licen­sing gain   (6 )     (10 )     (5 )     (34 )     (102 )
Ope­ra­ting inco­me (loss)   342       224       (149 )     401       1,264  
Inte­rest expense   (27 )     (26 )     (19 )     (106 )     (88 )
Other inco­me (expen­se), net   49       59       32       197       8  
Inco­me (loss) befo­re inco­me taxes and equi­ty income   364       257       (136 )     492       1,184  
Inco­me tax benefit   (297 )     (39 )     (154 )     (346 )     (122 )
Equi­ty inco­me in investee   6       3       3       16       14  
Net inco­me $ 667     $ 299     $ 21     $ 854     $ 1,320  
Ear­nings per share                  
Basic $ 0.41     $ 0.18     $ 0.01     $ 0.53     $ 0.85  
Diluted $ 0.41     $ 0.18     $ 0.01     $ 0.53     $ 0.84  
Shares used in per share calculation                  
Basic   1,616       1,616       1,613       1,614       1,561  
Diluted   1,628       1,629       1,618       1,625       1,571  
                                       

 

ADVANCED MICRO DEVICES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Mil­li­ons)

  Decem­ber 30,
2023
  Decem­ber 31,
2022
  (Unau­di­ted)    
ASSETS      
Cur­rent assets:      
Cash and cash equivalents $ 3,933     $ 4,835  
Short-term invest­ments   1,840       1,020  
Accounts receiva­ble, net   5,376       4,126  
Invent­ories   4,351       3,771  
Receiv­a­bles from rela­ted parties   9       2  
Pre­paid expen­ses and other cur­rent assets   1,259       1,265  
Total cur­rent assets   16,768       15,019  
Pro­per­ty and equip­ment, net   1,589       1,513  
Ope­ra­ting lea­se right-of-use assets   633       460  
Good­will   24,262       24,177  
Acqui­si­ti­on-rela­ted intan­gi­bles, net   21,363       24,118  
Invest­ment: equi­ty method   99       83  
Defer­red tax assets   366       58  
Other non-cur­rent assets   2,805       2,152  
Total Assets $ 67,885     $ 67,580  
       
LIABILITIES AND STOCKHOLDERSEQUITY      
Cur­rent liabilities:      
Accounts paya­ble $ 2,055     $ 2,493  
Paya­bles to rela­ted parties   363       463  
Accrued lia­bi­li­ties   3,082       3,077  
Cur­rent por­ti­on of long-term debt, net   751        
Other cur­rent liabilities   438       336  
Total cur­rent liabilities   6,689       6,369  
Long-term debt, net of cur­rent portion   1,717       2,467  
Long-term ope­ra­ting lea­se liabilities   535       396  
Defer­red tax liabilities   1,202       1,934  
Other long-term liabilities   1,850       1,664  
       
Stock­hol­ders’ equity:      
Capi­tal stock:      
Com­mon stock, par value   17       16  
Addi­tio­nal paid-in capital   59,676       58,005  
Tre­asu­ry stock, at cost   (4,514 )     (3,099 )
Retai­ned ear­nings (Accu­mu­la­ted deficit)   723       (131 )
Accu­mu­la­ted other com­pre­hen­si­ve loss   (10 )     (41 )
Total stock­hol­ders’ equity $ 55,892     $ 54,750  
Total Lia­bi­li­ties and Stock­hol­ders’ Equity $ 67,885     $ 67,580  
 

 

ADVANCED MICRO DEVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Mil­li­ons) (Unau­di­ted)

  Three Months Ended   Year Ended
  Decem­ber 30,
2023
  Decem­ber 31,
2022
  Decem­ber 30,
2023
  Decem­ber 31,
2022
Cash flows from ope­ra­ting activities:              
Net inco­me $ 667     $ 21     $ 854     $ 1,320  
Adjus­t­ments to recon­ci­le net inco­me to net cash pro­vi­ded by ope­ra­ting activities:              
Depre­cia­ti­on and amortization   799       1,220       3,453       4,174  
Stock-based com­pen­sa­ti­on   374       315       1,384       1,081  
Amor­tiza­ti­on of ope­ra­ting lea­se right-of-use assets   25       25       98       88  
Amor­tiza­ti­on of inven­to­ry fair value adjustment         2       3       189  
Loss on sale or dis­po­sal of pro­per­ty and equipment   1       1       11       16  
Defer­red inco­me taxes   (219 )     (177 )     (1,019 )     (1,505 )
(Gains) los­ses on equi­ty invest­ments, net         5       (1 )     62  
Other   (24 )     (5 )     (67 )     (14 )
Chan­ges in ope­ra­ting assets and liabilities              
Accounts receiva­ble, net   (321 )     210       (1,250 )     (1,091 )
Invent­ories   94       (404 )     (580 )     (1,401 )
Receiv­a­bles from rela­ted parties   (8 )     (12 )     (7 )     (13 )
Pre­paid expen­ses and other assets   (92 )     (372 )     (472 )     (1,197 )
Paya­bles to rela­ted parties   37       66       (100 )     379  
Accounts paya­ble   (181 )     120       (419 )     931  
Accrued and other liabilities   (771 )     (448 )     (221 )     546  
Net cash pro­vi­ded by ope­ra­ting activities   381       567       1,667       3,565  
Cash flows from inves­t­ing activities:              
Purcha­ses of pro­per­ty and equipment   (139 )     (124 )     (546 )     (450 )
Purcha­ses of short-term investments   (410 )     (268 )     (3,722 )     (2,667 )
Pro­ceeds from matu­ri­ty of short-term investments   770       1,446       2,687       4,310  
Pro­ceeds from sale of short-term investments   52             300        
Cash recei­ved from acqui­si­ti­on of Xilinx                     2,366  
Acqui­si­ti­ons, net of cash acquired   (117 )     14       (131 )     (1,544 )
Other   (6 )     (1 )     (11 )     (16 )
Net cash pro­vi­ded by (used in) inves­t­ing activities   150       1,067       (1,423 )     1,999  
Cash flows from finan­cing activities:              
Pro­ceeds from debt, net of issu­an­ce costs                     991  
Repay­ment of debt                     (312 )
Pro­ceeds from sales of com­mon stock through employee equi­ty plans   120       88       268       167  
Repurcha­ses of com­mon stock   (233 )     (250 )     (985 )     (3,702 )
Com­mon stock repurcha­ses for tax with­hol­ding on employee equi­ty plans   (45 )     (35 )     (427 )     (406 )
Other   (1 )           (2 )     (2 )
Net cash used in finan­cing activities   (159 )     (197 )     (1,146 )     (3,264 )
Net increase (decrease) in cash and cash equivalents   372       1,437       (902 )     2,300  
Cash and cash equi­va­lents at begin­ning of period   3,561       3,398       4,835       2,535  
Cash and cash equi­va­lents at end of period $ 3,933     $ 4,835     $ 3,933     $ 4,835  
 

 

ADVANCED MICRO DEVICES, INC.
SELECTED CORPORATE DATA
(Mil­li­ons) (Unau­di­ted)

  Three Months Ended   Year Ended
  Decem­ber 30,
2023
  Sep­tem­ber 30,
2023
  Decem­ber 31,
2022
  Decem­ber 30,
2023
  Decem­ber 31,
2022
Seg­ment and Cate­go­ry Infor­ma­ti­on(1)                  
Data Cen­ter                  
Net reve­nue $ 2,282     $ 1,598     $ 1,655     $ 6,496     $ 6,043  
Ope­ra­ting income $ 666     $ 306     $ 444     $ 1,267     $ 1,848  
Cli­ent                  
Net reve­nue $ 1,461     $ 1,453     $ 903     $ 4,651     $ 6,201  
Ope­ra­ting inco­me (loss) $ 55     $ 140     $ (152 )   $ (46 )   $ 1,190  
Gam­ing                  
Net reve­nue $ 1,368     $ 1,506     $ 1,644     $ 6,212     $ 6,805  
Ope­ra­ting income $ 224     $ 208     $ 266     $ 971     $ 953  
Embedded                  
Net reve­nue $ 1,057     $ 1,243     $ 1,397     $ 5,321     $ 4,552  
Ope­ra­ting income $ 461     $ 612     $ 699     $ 2,628     $ 2,252  
All Other                  
Net reve­nue $     $     $     $     $  
Ope­ra­ting loss $ (1,064 )   $ (1,042 )   $ (1,406 )   $ (4,419 )   $ (4,979 )
Total                  
Net reve­nue $ 6,168     $ 5,800     $ 5,599     $ 22,680     $ 23,601  
Ope­ra­ting inco­me (loss) $ 342     $ 224     $ (149 )   $ 401     $ 1,264  
                   
Other Data                  
Capi­tal expenditures $ 139     $ 124     $ 124     $ 546     $ 450  
Adjus­ted EBITDA(2) $ 1,576     $ 1,439     $ 1,438     $ 5,496     $ 6,971  
Cash, cash equi­va­lents and short-term investments $ 5,773     $ 5,785     $ 5,855     $ 5,773     $ 5,855  
Free cash flow(3) $ 242     $ 297     $ 443     $ 1,121     $ 3,115  
Total assets $ 67,885     $ 67,626     $ 67,580     $ 67,885     $ 67,580  
Total debt $ 2,468     $ 2,467     $ 2,467     $ 2,468     $ 2,467  

 

(1) The Data Cen­ter seg­ment pri­ma­ri­ly includes ser­ver micro­pro­ces­sors (CPUs), gra­phics pro­ces­sing units (GPUs), acce­le­ra­ted pro­ces­sing units (APUs), data pro­ces­sing units (DPUs), Field Pro­gramma­ble Gate Arrays (FPGAs), Smart Net­work Inter­face Cards (Smart­NICs), Arti­fi­ci­al Intel­li­gence (AI) acce­le­ra­tors and Adap­ti­ve Sys­tem-on-Chip (SoC) pro­ducts for data centers.
   
  The Cli­ent seg­ment pri­ma­ri­ly includes CPUs, APUs, and chip­sets for desk­top, note­book and hand­held per­so­nal computers.
   
  The Gam­ing seg­ment pri­ma­ri­ly includes dis­crete GPUs, and semi-cus­tom SoC pro­ducts and deve­lo­p­ment services.
   
  The Embedded seg­ment pri­ma­ri­ly includes embedded CPUs, GPUs, APUs, FPGAs, Sys­tem on Modu­les (SOMs), and Adap­ti­ve SoC 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, such as amor­tiza­ti­on of acqui­si­ti­on-rela­ted intan­gi­ble asset, employee stock-based com­pen­sa­ti­on expen­se, acqui­si­ti­on-rela­ted and other cos­ts, and licen­sing gain.
   
(2) Recon­ci­lia­ti­on of GAAP Net Inco­me to Adjus­ted EBITDA

 

  Three Months Ended   Year Ended
  Decem­ber 30,
2023
  Sep­tem­ber 30,
2023
  Decem­ber 31,
2022
  Decem­ber 30,
2023
  Decem­ber 31,
2022
GAAP net income $ 667     $ 299     $ 21     $ 854     $ 1,320  
Inte­rest expense   27       26       19       106       88  
Other (inco­me) expen­se, net   (49 )     (59 )     (32 )     (197 )     (8 )
Inco­me tax benefit   (297 )     (39 )     (154 )     (346 )     (122 )
Equi­ty inco­me in investee   (6 )     (3 )     (3 )     (16 )     (14 )
Stock-based com­pen­sa­ti­on   374       353       310       1,380       1,012  
Depre­cia­ti­on and amortization   164       163       176       642       626  
Amor­tiza­ti­on of acqui­si­ti­on-rela­ted intangibles   635       660       1,044       2,811       3,548  
Acqui­si­ti­on-rela­ted and other costs   61       39       57       262       521  
Adjus­ted EBITDA $ 1,576     $ 1,439     $ 1,438     $ 5,496     $ 6,971  
 

The Com­pa­ny pres­ents “Adjus­ted EBITDA” as a sup­ple­men­tal mea­su­re of its per­for­mance. Adjus­ted EBITDA for the Com­pa­ny is deter­mi­ned by adjus­ting GAAP net inco­me for inte­rest expen­se, other inco­me (expen­se), net, inco­me tax bene­fit, equi­ty inco­me in inves­tee, stock-based com­pen­sa­ti­on, depre­cia­ti­on and amor­tiza­ti­on expen­se (inclu­ding amor­tiza­ti­on of acqui­si­ti­on-rela­ted intan­gi­bles), acqui­si­ti­on-rela­ted and other cos­ts. The Com­pa­ny cal­cu­la­tes and pres­ents Adjus­ted EBITDA becau­se manage­ment belie­ves it is of importance to inves­tors and len­ders in rela­ti­on to its over­all capi­tal struc­tu­re and its abili­ty to bor­row addi­tio­nal funds. In addi­ti­on, the Com­pa­ny pres­ents Adjus­ted EBITDA becau­se it belie­ves this mea­su­re assists inves­tors in com­pa­ring its per­for­mance across report­ing peri­ods on a con­sis­tent basis by exclu­ding items that the Com­pa­ny does not belie­ve are indi­ca­ti­ve of its core ope­ra­ting per­for­mance. The Company’s cal­cu­la­ti­on of Adjus­ted EBITDA may or may not be con­sis­tent with the cal­cu­la­ti­on of this mea­su­re by other com­pa­nies in the same indus­try. Inves­tors should not view Adjus­ted EBITDA as an alter­na­ti­ve to the GAAP ope­ra­ting mea­su­re of inco­me or GAAP liqui­di­ty mea­su­res of cash flows from ope­ra­ting, inves­t­ing and finan­cing acti­vi­ties. In addi­ti­on, Adjus­ted EBITDA does not take into account chan­ges in cer­tain assets and lia­bi­li­ties that can affect cash flows.

(3) Recon­ci­lia­ti­on of GAAP Net Cash Pro­vi­ded by Ope­ra­ting Acti­vi­ties to Free Cash Flow

 

  Three Months Ended   Year Ended
  Decem­ber 30,
2023
  Sep­tem­ber 30,
2023
  Decem­ber 31,
2022
  Decem­ber 30,
2023
  Decem­ber 31,
2022
GAAP net cash pro­vi­ded by ope­ra­ting activities $ 381     $ 421     $ 567     $ 1,667     $ 3,565  
Ope­ra­ting cash flow margin %   6 %     7 %     10 %     7 %     15 %
Purcha­ses of pro­per­ty and equipment   (139 )     (124 )     (124 )     (546 )     (450 )
Free cash flow $ 242     $ 297     $ 443     $ 1,121     $ 3,115  
Free cash flow margin %   4 %     5 %     8 %     5 %     13 %
                                       

The Com­pa­ny also pres­ents free cash flow as a sup­ple­men­tal Non-GAAP mea­su­re of its per­for­mance. Free cash flow is deter­mi­ned by adjus­ting GAAP net cash pro­vi­ded by ope­ra­ting acti­vi­ties for capi­tal expen­dit­ures, and free cash flow mar­gin % is free cash flow expres­sed as a per­cen­ta­ge of the Company’s net reve­nue. The Com­pa­ny cal­cu­la­tes and com­mu­ni­ca­tes free cash flow in the finan­cial ear­nings press release becau­se manage­ment belie­ves it is of importance to inves­tors to under­stand the natu­re of the­se cash flows. The Company’s cal­cu­la­ti­on of free cash flow may or may not be con­sis­tent with the cal­cu­la­ti­on of this mea­su­re by other com­pa­nies in the same indus­try. Inves­tors should not view free cash flow as an alter­na­ti­ve to GAAP liqui­di­ty mea­su­res of cash flows from ope­ra­ting activities.