AMD Reports Fourth Quarter and Full Year 2023 Financial Results

SANTA CLARA, Calif., Jan. 30, 2024 (GLOBE NEWSWIRE) AMD (NASDAQ:AMD) today announ짯ced reve짯nue for the fourth quar짯ter of 2023 of $6.2 bil짯li짯on, gross mar짯gin of 47%, ope짯ra짯ting inco짯me of $342 mil짯li짯on, net inco짯me of $667 mil짯li짯on and diluted ear짯nings per share of $0.41. On a non-GAAP(*) basis, gross mar짯gin was 51%, ope짯ra짯ting inco짯me was $1.4 bil짯li짯on, net inco짯me was $1.2 bil짯li짯on and diluted ear짯nings per share was $0.77.

For the full year 2023, the com짯pa짯ny repor짯ted reve짯nue of $22.7 bil짯li짯on, gross mar짯gin of 46%, ope짯ra짯ting inco짯me of $401 mil짯li짯on, net inco짯me of $854 mil짯li짯on and diluted ear짯nings per share of $0.53. On a non-GAAP(*) basis, gross mar짯gin was 50%, ope짯ra짯ting inco짯me was $4.9 bil짯li짯on, net inco짯me was $4.3 bil짯li짯on and diluted ear짯nings per share was $2.65.

We finis짯hed 2023 strong, with sequen짯ti짯al and year-over-year reve짯nue and ear짯nings growth dri짯ven by record quar짯ter짯ly AMD Instinct GPU and EPYC CPU sales and hig짯her AMD Ryzen pro짯ces짯sor sales, said AMD Chair and CEO Dr. Lisa Su. 쏡emand for our high-per짯for짯mance data cen짯ter pro짯duct port짯fo짯lio con짯ti짯nues to acce짯le짯ra짯te, posi짯tio짯ning us well to deli짯ver strong annu짯al growth in what is an incre짯di짯bly exci짯ting time as AI re-shapes vir짯tual짯ly every part of the com짯pu짯ting market.

 AMD exe짯cu짯ted well in 2023 despi짯te a mixed demand envi짯ron짯ment, said AMD EVP, CFO and Tre짯asurer Jean Hu. 쏻e dro짯ve year-over-year reve짯nue growth in our Data Cen짯ter and Embedded seg짯ments and suc짯cessful짯ly laun짯ched our AMD Instinct MI300 GPUs posi짯tio짯ning us for a strong pro짯duct ramp in 2024.

GAAP Quar짯ter짯ly Finan짯cial Results
 
  Q4 2023 Q4 2022 Y/Y Q3 2023 Q/Q
Reve짯nue ($M) $6,168 $5,599 Up 10% $5,800 Up 6%
Gross pro짯fit ($M) $2,911 $2,403 Up 21% $2,747 Up 6%
Gross mar짯gin 47% 43% Up 4 ppts 47% Flat
Ope짯ra짯ting expen짯ses ($M) $2,575 $2,557 Flat $2,533 Up 2%
Ope짯ra짯ting inco짯me (loss) ($M) $342 $(149) Up 330% $224 Up 53%
Ope짯ra짯ting margin 6% (3%) Up 9 ppts 4% Up 2 ppts
Net inco짯me ($M) $667 $21 Up 3,076% $299 Up 123%
Diluted ear짯nings per share $0.41 $0.01 Up 4,000% $0.18 Up 128%
           

 

Non-GAAP(*) Quar짯ter짯ly Finan짯cial Results
 
  Q4 2023 Q4 2022 Y/Y Q3 2023 Q/Q
Reve짯nue ($M) $6,168 $5,599 Up 10% $5,800 Up 6%
Gross pro짯fit ($M) $3,133 $2,859 Up 10% $2,963 Up 6%
Gross mar짯gin 51% 51% Flat 51% Flat
Ope짯ra짯ting expen짯ses ($M) $1,727 $1,602 Up 8% $1,697 Up 2%
Ope짯ra짯ting inco짯me ($M) $1,412 $1,262 Up 12% $1,276 Up 11%
Ope짯ra짯ting margin 23% 23% Flat 22% Up 1 ppt
Net inco짯me ($M) $1,249 $1,113 Up 12% $1,135 Up 10%
Diluted ear짯nings per share $0.77 $0.69 Up 12% $0.70 Up 10%
           

 

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

Seg짯ment Summary

  • Data Cen짯ter seg짯ment reve짯nue in the quar짯ter was $2.3 bil짯li짯on, up 38% year-over-year and 43% sequen짯ti짯al짯ly dri짯ven by strong growth in AMD Instinct꽓 GPUs and 4th Gen AMD EPYC꽓 CPUs. 
    • For 2023, Data Cen짯ter seg짯ment reve짯nue was $6.5 bil짯li짯on, an increase of 7% com짯pared to the pri짯or year, dri짯ven by strong growth in AMD Instinct GPUs and 4th Gen AMD EPYC CPUs.
  • Cli짯ent seg짯ment reve짯nue was $1.5 bil짯li짯on, up 62% year-over-year dri짯ven pri짯ma짯ri짯ly by an increase in AMD Ryzen꽓 7000 Series CPU sales. 
    • For 2023, Cli짯ent seg짯ment reve짯nue was $4.7 bil짯li짯on, down 25% com짯pared to the pri짯or year, due to a decli짯ne in the PC market.
  • Gam짯ing seg짯ment reve짯nue was $1.4 bil짯li짯on, down 17% year-over-year and 9% sequen짯ti짯al짯ly, due to a decrease in semi-cus짯tom reve짯nue, par짯ti짯al짯ly off짯set by an increase in AMD Rade짯on꽓 GPU sales. 
    • For 2023, Gam짯ing seg짯ment reve짯nue was $6.2 bil짯li짯on, down 9% com짯pared to the pri짯or year pri짯ma짯ri짯ly due to lower semi-cus짯tom sales.
  • Embedded seg짯ment reve짯nue was $1.1 bil짯li짯on, down 24% year-over-year and 15% sequen짯ti짯al짯ly pri짯ma짯ri짯ly due to cus짯to짯mers redu짯cing their inven짯to짯ry levels. 
    • For 2023, Embedded seg짯ment reve짯nue was $5.3 bil짯li짯on, up 17% com짯pared to the pri짯or year, pri짯ma짯ri짯ly due to the inclu짯si짯on of a full year of reve짯nue rela짯ted to the acqui짯si짯ti짯on of Xilinx com짯ple짯ted in Febru짯ary 2022.

Recent PR Highlights

  • AMD show짯ca짯sed gro짯wing momen짯tum for advan짯ced AMD tech짯no짯lo짯gy-powered AI solu짯ti짯ons from the data cen짯ter to PCs: 
    • AMD announ짯ced the gene짯ral avai짯la짯bi짯li짯ty of AMD Instinct MI300X acce짯le짯ra짯tors with indus짯try lea짯ding memo짯ry band짯width per짯for짯mance for gene짯ra짯ti짯ve AI as well as the AMD Instinct MI300A APU that com짯bi짯nes AMD CDNA꽓 3 and 쏾en 4 chip짯lets to deli짯ver breakth짯rough per짯for짯mance for HPC and AI workloads.
    • At the Advan짯cing AI event, Micro짯soft, Meta, Ora짯cle, Dell Tech짯no짯lo짯gies, HPE, Leno짯vo, Super짯mi짯cro, Aris짯ta, Broad짯com and Cis짯co show짯ca짯sed how they are lever짯aging AMD Instinct MI300X acce짯le짯ra짯tors to power cloud and enter짯pri짯se AI infrastructure.
    • AMD made signi짯fi짯cant pro짯gress expan짯ding its AI soft짯ware eco짯sys짯tem, inclu짯ding unvei짯ling the latest ver짯si짯on of its open-source ROCm꽓 6, soft짯ware stack opti짯mi짯zed for gene짯ra짯ti짯ve AI. AI eco짯sys짯tem lea짯ders inclu짯ding Dat짯ab짯ricks, Essen짯ti짯al AI, Lami짯ni and Ope짯nAI are lever짯aging AMD Instinct acce짯le짯ra짯tors to deli짯ver dif짯fe짯ren짯tia짯ted AI solu짯ti짯ons. AMD also exten짯ded sup짯port for ROCm soft짯ware to include the AMD Rade짯on RX 7900 XT GPU, pro짯vi짯ding even more opti짯ons for AI deve짯lo짯pers and rese짯ar짯chers to use AMD hard짯ware for their AI work.
    • AMD announ짯ced AMD Ryzen 8040 Series mobi짯le pro짯ces짯sors with an inte짯gra짯ted neu짯ral pro짯ces짯sing unit (NPU) on sel짯ect models for AI. In 2022, AMD was the first com짯pa짯ny to intro짯du짯ce an x86 pro짯ces짯sor with an on-chip NPU to acce짯le짯ra짯te AI workloads with the AMD Ryzen 7040 series mobi짯le pro짯ces짯sors. The updated NPU in the AMD Ryzen 8040 series deli짯vers up to 1.6x more AI pro짯ces짯sing per짯for짯mance com짯pared to AMD Ryzen 7040 Series mobi짯le pro짯ces짯sors. Acer, ASUS, Leno짯vo, Razer and other PC OEMs intro짯du짯ced new lap짯tops fea짯turing AMD Ryzen 8040 Series pro짯ces짯sors, with the first sys짯tems on-track to go on sale this quarter.
    • At CES 2024, AMD announ짯ced the AMD Ryzen 8000G Series desk짯top pro짯ces짯sors that are the first desk짯top PC pro짯ces짯sors in the indus짯try to include a dedi짯ca짯ted AI NPU to power AI capa짯bi짯li짯ties on the PC.
    • At Micro짯soft Igni짯te, AMD and Micro짯soft high짯ligh짯ted how AMD Instinct MI300X acce짯le짯ra짯tors, AMD EPYC CPUs and AMD Ryzen CPUs with AI engi짯nes are enab짯ling new ser짯vices and com짯pu짯te capa짯bi짯li짯ties across cloud and gene짯ra짯ti짯ve AI, con짯fi짯den짯ti짯al com짯pu짯ting, cloud com짯pu짯ting and AI-capa짯ble PCs.
  • AMD show짯ca짯sed con짯tin짯ued lea짯der짯ship in supercomputing: 
    • Eni announ짯ced a new super짯com짯pu짯ter, HPC6, powered by AMD EPYC CPUs and AMD Instinct GPUs. When com짯ple짯ted, the HPC6 sys짯tem will be one of the world셲 most powerful super짯com짯pu짯ters dedi짯ca짯ted to indus짯tri짯al applications.
    • AMD EPYC pro짯ces짯sors and AMD Instinct acce짯le짯ra짯tors now power 140 super짯com짯pu짯ters on the latest Top500 list of the world셲 fas짯test com짯pu짯ters and eight of the top 10 most ener짯gy effi짯ci짯ent super짯com짯pu짯ters in the world based on the latest Green500 list. The Fron짯tier super짯com짯pu짯ter powered by AMD EPYC and AMD Instinct pro짯ces짯sors remains the fas짯test super짯com짯pu짯ter in the world.
  • AMD exten짯ded its 3rd Gen AMD EPYC pro짯ces짯sor lin짯e짯up with six new CPUs that deli짯ver excel짯lent value, per짯for짯mance, ener짯gy effi짯ci짯en짯cy and secu짯ri짯ty fea짯tures for main짯stream applications.
  • AMD intro짯du짯ced the AMD Rade짯on RX 7600 XT GPU, a high-per짯for짯mance gra짯phics card desi짯gned to deli짯ver immersi짯ve 1080P gam짯ing experiences.
  • AMD intro짯du짯ced the AMD Ver짯sal꽓 AI Edge XA Series and AMD Ryzen Embedded V2000A devices desi짯gned for auto짯mo짯ti짯ve focus seg짯ments inclu짯ding info짯tain짯ment, advan짯ced dri짯ver safe짯ty and auto짯no짯mous driving.
  • AMD announ짯ced the AMD Ryzen Embedded 7000 Series pro짯ces짯sors, deli짯ve짯ring lea짯der짯ship per짯for짯mance and advan짯ced fea짯tures for indus짯tri짯al and edge solu짯ti짯ons. The launch was sup짯port짯ed by a gro짯wing part짯ner eco짯sys짯tem, inclu짯ding inte짯gra짯ted solu짯ti짯ons from Advan짯tech, ASRock and DFI.

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 first quar짯ter of 2024, AMD expects reve짯nue to be appro짯xi짯m짯ate짯ly $5.4 bil짯li짯on, plus or minus $300 mil짯li짯on. Sequen짯ti짯al짯ly, AMD expects Data Cen짯ter seg짯ment reve짯nue to be flat, with a sea짯so짯nal decli짯ne in ser짯ver sales off짯set by a strong Data Cen짯ter GPU ramp. Cli짯ent, Embedded and Gam짯ing seg짯ment sales are expec짯ted to decli짯ne sequen짯ti짯al짯ly, with semi-cus짯tom reve짯nue expec짯ted to decli짯ne by a signi짯fi짯cant dou짯ble-digit per짯cen짯ta짯ge. Non-GAAP gross mar짯gin is expec짯ted to be appro짯xi짯m짯ate짯ly 52%.

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 fourth quar짯ter and full-year 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   Year Ended
  Decem짯ber 30, 
2023
  Sep짯tem짯ber 30, 
2023
  Decem짯ber 31, 
2022
  Decem짯ber 30, 
2023
  Decem짯ber 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 com짯pen짯sa짯ti짯on   6       6       9       30       29  
Amor짯tiza짯ti짯on of acqui짯si짯ti짯on-rela짯ted intangibles   215       210       443       942       1,448  
Acqui짯si짯ti짯on-rela짯ted and other cos짯ts(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 ope짯ra짯ting expenses $ 2,575     $ 2,533     $ 2,557     $ 10,093     $ 9,441  
GAAP ope짯ra짯ting expenses/revenue %   42 %     44 %     46 %     45 %     40 %
Stock-based com짯pen짯sa짯ti짯on   368       347       301       1,350       983  
Amor짯tiza짯ti짯on of acqui짯si짯ti짯on-rela짯ted intangibles   420       450       601       1,869       2,100  
Acqui짯si짯ti짯on-rela짯ted and other cos짯ts(1)   60       39       53       258       328  
Non-GAAP ope짯ra짯ting expenses $ 1,727     $ 1,697     $ 1,602     $ 6,616     $ 6,030  
Non-GAAP ope짯ra짯ting expenses/revenue %   28 %     29 %     29 %     29 %     26 %
                   
GAAP ope짯ra짯ting inco짯me (loss) $ 342     $ 224     $ (149 )   $ 401     $ 1,264  
GAAP ope짯ra짯ting margin   6 %     4 %   (3)%     2 %     5 %
Stock-based com짯pen짯sa짯ti짯on   374       353       310       1,380       1,012  
Amor짯tiza짯ti짯on of acqui짯si짯ti짯on-rela짯ted intangibles   635       660       1,044       2,811       3,548  
Acqui짯si짯ti짯on-rela짯ted and other cos짯ts(1)   61       39       57       262       521  
Non-GAAP ope짯ra짯ting income $ 1,412     $ 1,276     $ 1,262     $ 4,854     $ 6,345  
Non-GAAP ope짯ra짯ting margin   23 %     22 %     23 %     21 %     27 %
                                       

 

  Three Months Ended Year Ended
  Decem짯ber 30, 
2023
  Sep짯tem짯ber 30,
2023
  Decem짯ber 31, 
2022
  Decem짯ber 30, 
2023
  Decem짯ber 31, 
2022
GAAP net inco짯me / ear짯nings per share $ 667     $ 0.41     $ 299     $ 0.18     $ 21     $ 0.01     $ 854     $ 0.53     $ 1,320     $ 0.84  
(Gains) los짯ses on equi짯ty invest짯ments, net   1             (4 )           5             (1 )           62       0.04  
Stock-based com짯pen짯sa짯ti짯on   374       0.23       353       0.22       310       0.19       1,380       0.85       1,012       0.64  
Equi짯ty inco짯me in investee   (6 )           (3 )           (3 )           (16 )     (0.01 )     (14 )     (0.01 )
Amor짯tiza짯ti짯on of acqui짯si짯ti짯on-rela짯ted intangibles   635       0.39       660       0.41       1,044       0.65       2,811       1.73       3,548       2.26  
Acqui짯si짯ti짯on-rela짯ted and other cos짯ts(1)   61       0.04       39       0.02       57       0.04       262       0.16       521       0.33  
Inco짯me tax provision   (483 )     (0.30 )     (209 )     (0.13 )     (321 )     (0.20 )     (988 )     (0.61 )     (945 )     (0.60 )
Non-GAAP net inco짯me / ear짯nings per share $ 1,249     $ 0.77     $ 1,135     $ 0.70     $ 1,113     $ 0.69     $ 4,302     $ 2.65     $ 5,504     $ 3.50  

 

(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 X pages.

Cau짯tio짯na짯ry Statement

This press release con짯ta짯ins for짯ward-loo짯king state짯ments con짯cer짯ning Advan짯ced Micro Devices, Inc. (AMD) such as AMD셲 expec짯ta짯ti짯ons regar짯ding the demand for its high-per짯for짯mance data cen짯ter pro짯duct port짯fo짯lio and AMD셲 abili짯ty to deli짯ver strong annu짯al growth in 2024; expec짯ted future AI tech짯no짯lo짯gy trends and deve짯lo짯p짯ments; expec짯ted AMD Instinct꽓 MI 300 GPU demand and pro짯duct ramp in 2024; the fea짯tures, func짯tion짯a짯li짯ty, per짯for짯mance, avai짯la짯bi짯li짯ty, timing and expec짯ted bene짯fits of AMD pro짯ducts; and AMD셲 expec짯ted first quar짯ter 2024 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; 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 ope짯ra짯ting AMD셲 new짯ly upgraded 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, memo짯ry 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 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; 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 and eco짯no짯mic risks and natu짯ral dis짯as짯ters; future impairm짯ents of tech짯no짯lo짯gy licen짯se purcha짯ses; AMD셲 abili짯ty to attract and retain qua짯li짯fied per짯son짯nel; and AMD셲 stock pri짯ce vola짯ti짯li짯ty. 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 used a non-GAAP tax rate of 13%, which excludes the tax impact of pre-tax non-GAAP adjus짯t짯ments. 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 Janu짯ary 30, 2024, 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, Alveo, Kria, Fide짯li짯ty짯FX, 3D V멌ache, Ultras짯ca짯le+, Zynq, Thre짯ad짯rip짯per 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   Year Ended
  Decem짯ber 30,
2023
  Sep짯tem짯ber 30,
2023
  Decem짯ber 31,
2022
  Decem짯ber 30,
2023
  Decem짯ber 31,
2022
Net reve짯nue $ 6,168     $ 5,800     $ 5,599     $ 22,680     $ 23,601  
Cost of sales   3,042       2,843       2,753       11,278       11,550  
Amor짯tiza짯ti짯on of acqui짯si짯ti짯on-rela짯ted intangibles   215       210       443       942       1,448  
Total cost of sales   3,257       3,053       3,196       12,220       12,998  
Gross pro짯fit   2,911       2,747       2,403       10,460       10,603  
Gross mar짯gin   47 %     47 %     43 %     46 %     45 %
Rese짯arch and development   1,511       1,507       1,366       5,872       5,005  
Mar짯ke짯ting, gene짯ral and administrative   644       576       590       2,352       2,336  
Amor짯tiza짯ti짯on of acqui짯si짯ti짯on-rela짯ted intangibles   420       450       601       1,869       2,100  
Licen짯sing gain   (6 )     (10 )     (5 )     (34 )     (102 )
Ope짯ra짯ting inco짯me (loss)   342       224       (149 )     401       1,264  
Inte짯rest expense   (27 )     (26 )     (19 )     (106 )     (88 )
Other inco짯me (expen짯se), net   49       59       32       197       8  
Inco짯me (loss) befo짯re inco짯me taxes and equi짯ty income   364       257       (136 )     492       1,184  
Inco짯me tax benefit   (297 )     (39 )     (154 )     (346 )     (122 )
Equi짯ty inco짯me in investee   6       3       3       16       14  
Net inco짯me $ 667     $ 299     $ 21     $ 854     $ 1,320  
Ear짯nings 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
(Mil짯li짯ons)

  Decem짯ber 30,
2023
  Decem짯ber 31,
2022
  (Unau짯di짯ted)    
ASSETS      
Cur짯rent assets:      
Cash and cash equivalents $ 3,933     $ 4,835  
Short-term invest짯ments   1,840       1,020  
Accounts receiva짯ble, net   5,376       4,126  
Invent짯ories   4,351       3,771  
Receiv짯a짯bles from rela짯ted parties   9       2  
Pre짯paid expen짯ses and other cur짯rent assets   1,259       1,265  
Total cur짯rent assets   16,768       15,019  
Pro짯per짯ty and equip짯ment, net   1,589       1,513  
Ope짯ra짯ting lea짯se right-of-use assets   633       460  
Good짯will   24,262       24,177  
Acqui짯si짯ti짯on-rela짯ted intan짯gi짯bles, net   21,363       24,118  
Invest짯ment: equi짯ty method   99       83  
Defer짯red tax assets   366       58  
Other non-cur짯rent assets   2,805       2,152  
Total Assets $ 67,885     $ 67,580  
       
LIABILITIES AND STOCKHOLDERS EQUITY      
Cur짯rent liabilities:      
Accounts paya짯ble $ 2,055     $ 2,493  
Paya짯bles to rela짯ted parties   363       463  
Accrued lia짯bi짯li짯ties   3,082       3,077  
Cur짯rent por짯ti짯on of long-term debt, net   751        
Other cur짯rent liabilities   438       336  
Total cur짯rent liabilities   6,689       6,369  
Long-term debt, net of cur짯rent portion   1,717       2,467  
Long-term ope짯ra짯ting lea짯se liabilities   535       396  
Defer짯red tax liabilities   1,202       1,934  
Other long-term liabilities   1,850       1,664  
       
Stock짯hol짯ders equity:      
Capi짯tal stock:      
Com짯mon stock, par value   17       16  
Addi짯tio짯nal paid-in capital   59,676       58,005  
Tre짯asu짯ry stock, at cost   (4,514 )     (3,099 )
Retai짯ned ear짯nings (Accu짯mu짯la짯ted deficit)   723       (131 )
Accu짯mu짯la짯ted other com짯pre짯hen짯si짯ve loss   (10 )     (41 )
Total stock짯hol짯ders equity $ 55,892     $ 54,750  
Total Lia짯bi짯li짯ties and Stock짯hol짯ders Equity $ 67,885     $ 67,580  
 

 

ADVANCED MICRO DEVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Mil짯li짯ons) (Unau짯di짯ted)

  Three Months Ended   Year Ended
  Decem짯ber 30,
2023
  Decem짯ber 31,
2022
  Decem짯ber 30,
2023
  Decem짯ber 31,
2022
Cash flows from ope짯ra짯ting activities:              
Net inco짯me $ 667     $ 21     $ 854     $ 1,320  
Adjus짯t짯ments to recon짯ci짯le net inco짯me to net cash pro짯vi짯ded by ope짯ra짯ting activities:              
Depre짯cia짯ti짯on and amortization   799       1,220       3,453       4,174  
Stock-based com짯pen짯sa짯ti짯on   374       315       1,384       1,081  
Amor짯tiza짯ti짯on of ope짯ra짯ting lea짯se right-of-use assets   25       25       98       88  
Amor짯tiza짯ti짯on of inven짯to짯ry fair value adjustment         2       3       189  
Loss on sale or dis짯po짯sal of pro짯per짯ty and equipment   1       1       11       16  
Defer짯red inco짯me taxes   (219 )     (177 )     (1,019 )     (1,505 )
(Gains) los짯ses on equi짯ty invest짯ments, net         5       (1 )     62  
Other   (24 )     (5 )     (67 )     (14 )
Chan짯ges in ope짯ra짯ting assets and liabilities              
Accounts receiva짯ble, net   (321 )     210       (1,250 )     (1,091 )
Invent짯ories   94       (404 )     (580 )     (1,401 )
Receiv짯a짯bles from rela짯ted parties   (8 )     (12 )     (7 )     (13 )
Pre짯paid expen짯ses and other assets   (92 )     (372 )     (472 )     (1,197 )
Paya짯bles to rela짯ted parties   37       66       (100 )     379  
Accounts paya짯ble   (181 )     120       (419 )     931  
Accrued and other liabilities   (771 )     (448 )     (221 )     546  
Net cash pro짯vi짯ded by ope짯ra짯ting activities   381       567       1,667       3,565  
Cash flows from inves짯t짯ing activities:              
Purcha짯ses of pro짯per짯ty and equipment   (139 )     (124 )     (546 )     (450 )
Purcha짯ses of short-term investments   (410 )     (268 )     (3,722 )     (2,667 )
Pro짯ceeds from matu짯ri짯ty of short-term investments   770       1,446       2,687       4,310  
Pro짯ceeds from sale of short-term investments   52             300        
Cash recei짯ved from acqui짯si짯ti짯on of Xilinx                     2,366  
Acqui짯si짯ti짯ons, net of cash acquired   (117 )     14       (131 )     (1,544 )
Other   (6 )     (1 )     (11 )     (16 )
Net cash pro짯vi짯ded by (used in) inves짯t짯ing activities   150       1,067       (1,423 )     1,999  
Cash flows from finan짯cing activities:              
Pro짯ceeds from debt, net of issu짯an짯ce costs                     991  
Repay짯ment of debt                     (312 )
Pro짯ceeds from sales of com짯mon stock through employee equi짯ty plans   120       88       268       167  
Repurcha짯ses of com짯mon stock   (233 )     (250 )     (985 )     (3,702 )
Com짯mon stock repurcha짯ses for tax with짯hol짯ding on employee equi짯ty plans   (45 )     (35 )     (427 )     (406 )
Other   (1 )           (2 )     (2 )
Net cash used in finan짯cing activities   (159 )     (197 )     (1,146 )     (3,264 )
Net increase (decrease) in cash and cash equivalents   372       1,437       (902 )     2,300  
Cash and cash equi짯va짯lents at begin짯ning of period   3,561       3,398       4,835       2,535  
Cash and cash equi짯va짯lents at end of period $ 3,933     $ 4,835     $ 3,933     $ 4,835  
 

 

ADVANCED MICRO DEVICES, INC.
SELECTED CORPORATE DATA
(Mil짯li짯ons) (Unau짯di짯ted)

  Three Months Ended   Year Ended
  Decem짯ber 30,
2023
  Sep짯tem짯ber 30,
2023
  Decem짯ber 31,
2022
  Decem짯ber 30,
2023
  Decem짯ber 31,
2022
Seg짯ment and Cate짯go짯ry Infor짯ma짯ti짯on(1)                  
Data Cen짯ter                  
Net reve짯nue $ 2,282     $ 1,598     $ 1,655     $ 6,496     $ 6,043  
Ope짯ra짯ting income $ 666     $ 306     $ 444     $ 1,267     $ 1,848  
Cli짯ent                  
Net reve짯nue $ 1,461     $ 1,453     $ 903     $ 4,651     $ 6,201  
Ope짯ra짯ting inco짯me (loss) $ 55     $ 140     $ (152 )   $ (46 )   $ 1,190  
Gam짯ing                  
Net reve짯nue $ 1,368     $ 1,506     $ 1,644     $ 6,212     $ 6,805  
Ope짯ra짯ting income $ 224     $ 208     $ 266     $ 971     $ 953  
Embedded                  
Net reve짯nue $ 1,057     $ 1,243     $ 1,397     $ 5,321     $ 4,552  
Ope짯ra짯ting income $ 461     $ 612     $ 699     $ 2,628     $ 2,252  
All Other                  
Net reve짯nue $     $     $     $     $  
Ope짯ra짯ting loss $ (1,064 )   $ (1,042 )   $ (1,406 )   $ (4,419 )   $ (4,979 )
Total                  
Net reve짯nue $ 6,168     $ 5,800     $ 5,599     $ 22,680     $ 23,601  
Ope짯ra짯ting inco짯me (loss) $ 342     $ 224     $ (149 )   $ 401     $ 1,264  
                   
Other Data                  
Capi짯tal expenditures $ 139     $ 124     $ 124     $ 546     $ 450  
Adjus짯ted EBITDA(2) $ 1,576     $ 1,439     $ 1,438     $ 5,496     $ 6,971  
Cash, cash equi짯va짯lents 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 Cen짯ter seg짯ment pri짯ma짯ri짯ly includes ser짯ver micro짯pro짯ces짯sors (CPUs), gra짯phics pro짯ces짯sing units (GPUs), acce짯le짯ra짯ted pro짯ces짯sing units (APUs), data pro짯ces짯sing units (DPUs), Field Pro짯gramma짯ble Gate Arrays (FPGAs), Smart Net짯work Inter짯face Cards (Smart짯NICs), Arti짯fi짯ci짯al Intel짯li짯gence (AI) acce짯le짯ra짯tors and Adap짯ti짯ve Sys짯tem-on-Chip (SoC) pro짯ducts for data centers.
   
  The Cli짯ent seg짯ment pri짯ma짯ri짯ly includes CPUs, APUs, and chip짯sets for desk짯top, note짯book and hand짯held per짯so짯nal computers.
   
  The Gam짯ing seg짯ment pri짯ma짯ri짯ly includes dis짯crete GPUs, and semi-cus짯tom SoC pro짯ducts and deve짯lo짯p짯ment services.
   
  The Embedded seg짯ment pri짯ma짯ri짯ly includes embedded CPUs, GPUs, APUs, FPGAs, Sys짯tem on Modu짯les (SOMs), 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 to Adjus짯ted EBITDA

 

  Three Months Ended   Year Ended
  Decem짯ber 30,
2023
  Sep짯tem짯ber 30,
2023
  Decem짯ber 31,
2022
  Decem짯ber 30,
2023
  Decem짯ber 31,
2022
GAAP net income $ 667     $ 299     $ 21     $ 854     $ 1,320  
Inte짯rest expense   27       26       19       106       88  
Other (inco짯me) expen짯se, net   (49 )     (59 )     (32 )     (197 )     (8 )
Inco짯me tax benefit   (297 )     (39 )     (154 )     (346 )     (122 )
Equi짯ty inco짯me in investee   (6 )     (3 )     (3 )     (16 )     (14 )
Stock-based com짯pen짯sa짯ti짯on   374       353       310       1,380       1,012  
Depre짯cia짯ti짯on and amortization   164       163       176       642       626  
Amor짯tiza짯ti짯on of acqui짯si짯ti짯on-rela짯ted intangibles   635       660       1,044       2,811       3,548  
Acqui짯si짯ti짯on-rela짯ted and other costs   61       39       57       262       521  
Adjus짯ted EBITDA $ 1,576     $ 1,439     $ 1,438     $ 5,496     $ 6,971  
 

The Com짯pa짯ny pres짯ents 쏛djus짯ted EBITDA as a sup짯ple짯men짯tal mea짯su짯re of its per짯for짯mance. Adjus짯ted EBITDA for the Com짯pa짯ny is deter짯mi짯ned by adjus짯ting GAAP net inco짯me for inte짯rest expen짯se, other inco짯me (expen짯se), net, inco짯me tax 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   Year Ended
  Decem짯ber 30,
2023
  Sep짯tem짯ber 30,
2023
  Decem짯ber 31,
2022
  Decem짯ber 30,
2023
  Decem짯ber 31,
2022
GAAP net cash pro짯vi짯ded by ope짯ra짯ting activities $ 381     $ 421     $ 567     $ 1,667     $ 3,565  
Ope짯ra짯ting cash flow margin %   6 %     7 %     10 %     7 %     15 %
Purcha짯ses of pro짯per짯ty 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 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.