“Our second quar­ter results demons­tra­te strong growth dri­ven by lea­der­ship pro­ducts and focu­sed exe­cu­ti­on,” said Dr. Lisa Su, AMD pre­si­dent and CEO. “Our Ryzen desk­top pro­ces­sors, Vega GPUs, and EPYC dat­a­cen­ter pro­ducts have recei­ved tre­men­dous indus­try reco­gni­ti­on. We are very plea­sed with our impro­ved finan­cial per­for­mance, inclu­ding dou­ble digit reve­nue growth and year-over-year gross mar­gin expan­si­on on the strength of our new products.”

Q2 2017 Results

• On a GAAP basis, reve­nue was $1.22 bil­li­on, up 19 per­cent year-over-year, dri­ven by hig­her reve­nue in the Com­pu­ting and Gra­phics seg­ment. Reve­nue was up 24 per­cent sequen­ti­al­ly, dri­ven by increased sales in both busi­ness seg­ments. Gross mar­gin was 33 per­cent, up 2 per­cen­ta­ge points year-over-year due to a richer pro­duct mix and a hig­her per­cen­ta­ge of reve­nue from the Com­pu­ting and Gra­phics seg­ment, dri­ven by the first full quar­ter of Ryzen pro­ces­sor sales. On a sequen­ti­al basis, gross mar­gin decli­ned 1 per­cen­ta­ge point due to a hig­her per­cen­ta­ge of reve­nue from the Enter­pri­se, Embedded and Semi-Cus­tom seg­ment. Ope­ra­ting inco­me was $25 mil­li­on com­pared to an ope­ra­ting loss of $8 mil­li­on a year ago and an ope­ra­ting loss of $29 mil­li­on in the pri­or quar­ter. Net loss was $16 mil­li­on com­pared to net inco­me of $69 mil­li­on a year ago and a net loss of $73 mil­li­on in the pri­or quar­ter. Loss per share was $0.02 com­pared to diluted ear­nings per share of $0.08 a year ago (which included a pre-tax gain of $150 mil­li­on rela­ted to our ATMP JV tran­sac­tion) and a loss per share of $0.08 in the pri­or quarter.
• On a non-GAAP⁽¹⁾ basis, ope­ra­ting inco­me was $49 mil­li­on com­pared to ope­ra­ting inco­me of $3 mil­li­on a year ago and an ope­ra­ting loss of $6 mil­li­on in the pri­or quar­ter. Net inco­me was $19 mil­li­on com­pared to a net loss of $40 mil­li­on a year ago and a net loss of $38 mil­li­on in the pri­or quar­ter. Diluted ear­nings per share was $0.02 com­pared to a loss per share of $0.05 a year ago and a loss per share of $0.04 in the pri­or quarter.
• Cash, cash equi­va­lents, and mar­ke­ta­ble secu­ri­ties were $844 mil­li­on at the end of the quar­ter, com­pared to $943 mil­li­on in the pri­or quarter.

Quar­ter­ly Finan­cial Seg­ment Summary

• Com­pu­ting and Gra­phics seg­ment reve­nue was $659 mil­li­on, up 51 per­cent year-over-year, dri­ven by demand for gra­phics and Ryzen desk­top processors.

• Ope­ra­ting inco­me was $7 mil­li­on, com­pared to an ope­ra­ting loss of $81 mil­li­on in Q2 2016. The year-over-year impro­ve­ment was dri­ven pri­ma­ri­ly by hig­her reve­nue and impro­ved pro­duct mix.
• Cli­ent avera­ge sel­ling pri­ce (ASP) increased signi­fi­cant­ly year-over-year, as desk­top pro­ces­sor ASP increased due to the first full quar­ter of Ryzen pro­ces­sor shipments.
• GPU ASP increased year-over-year.

• Enter­pri­se, Embedded and Semi-Cus­tom seg­ment reve­nue was $563 mil­li­on, down 5 per­cent year-over-year pri­ma­ri­ly due to lower semi-cus­tom SoC sales.  In the quar­ter, AMD rea­ched an important mile­stone by reco­gni­zing initi­al reve­nue from EPYC dat­a­cen­ter pro­ces­sor shipments.

• Ope­ra­ting inco­me was $42 mil­li­on, com­pared to ope­ra­ting inco­me of $84 mil­li­on in Q2 2016. The year-over-year decrease was pri­ma­ri­ly due to lower reve­nue and hig­her dat­a­cen­ter rela­ted R&D investments.

• All Other ope­ra­ting loss was $24 mil­li­on com­pared with an ope­ra­ting loss of $11 mil­li­on in Q2 2016. The year-over-year dif­fe­rence in ope­ra­ting loss was rela­ted to stock-based com­pen­sa­ti­on char­ges and a $7 mil­li­on res­truc­tu­ring cre­dit in Q2 2016.

Q2 2017 Highlights

• AMD laun­ched its new “Zen” archi­tec­tu­re-based EPYC™ 7000 series pro­ces­sors, retur­ning inno­va­ti­on and choice to the x86 ser­ver mar­ket with record set­ting sin­gle and dual-socket per­for­mance and pro­duct intro­duc­tions from 10 of the world’s lar­gest ser­ver manufacturers.
• AMD intro­du­ced its upco­ming high-end desk­top solu­ti­on tar­ge­ted at the world’s fas­test ultra-pre­mi­um desk­top sys­tems, the Ryzen™ Thre­ad­rip­per™ CPU.
• AMD unvei­led new details about its upco­ming Ryzen™ 3 desk­top CPUs.
• AMD laun­ched its Ryzen™ PRO desk­top pro­ces­sors, desi­gned to bring relia­bi­li­ty, secu­ri­ty, and per­for­mance to enter­pri­se desktops.
• AMD announ­ced that Rade­on Instinct™ acce­le­ra­tors, inclu­ding Rade­on Instinct MI25, MI8, and MI6, tog­e­ther with AMD’s open ROCm 1.6 soft­ware plat­form, will ship in Q3 2017.
• AMD laun­ched the Rade­on™ Vega Fron­tier Edi­ti­on gra­phics card which expands the capa­ci­ty of tra­di­tio­nal GPU memo­ry to 256TB by lever­aging sys­tem memory.
• AMD intro­du­ced the Rade­on™ RX 580 and Rade­on™ RX 570 gra­phics cards, engi­nee­red using the 2nd gene­ra­ti­on Pola­ris archi­tec­tu­re for smooth gam­ing in lea­ding AAA games at HD reso­lu­ti­ons and higher.
• Micro­soft^® unvei­led new details and bran­ding for its Xbox One X™ (form­er­ly “Pro­ject Scor­pio”), which fea­tures an AMD semi-cus­tom chip.
• AMD announ­ced that it has been sel­ec­ted by the Depart­ment of Energy’s Exas­ca­le Com­pu­ting Pro­ject (ECP) to acce­le­ra­te cri­ti­cal com­pu­ting tech­no­lo­gy rese­arch for the deve­lo­p­ment of the nation’s first exas­ca­le supercomputers.
• At Finan­cial Ana­lyst Day, AMD detail­ed the next pha­se of its long-term growth stra­tegy focu­sed on deli­ve­ring pro­ducts and tech­no­lo­gies for a com­bi­ned $60 bil­lionmar­ket for PCs, immersi­ve devices, and datacenters.
• AMD announ­ced the appoint­ment of Abhi Y. Tal­wal­kar to its board of directors.

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 third quar­ter of 2017, AMD expects reve­nue to increase appro­xi­m­ate­ly 23 per­cent sequen­ti­al­ly, plus or minus 3 per­cent. The mid­point of gui­dance would result in third quar­ter 2017 reve­nue incre­asing appro­xi­m­ate­ly 15 per­cent year-over-year. AMD now expects annu­al reve­nue to increase by a mid to high-teens per­cen­ta­ge, com­pared to pri­or gui­dance of low dou­ble digit per­cen­ta­ge reve­nue growth.

For addi­tio­nal details regar­ding AMD’s results and out­look plea­se see the CFO com­men­ta­ry pos­ted at quarterlyearnings.amd.com.

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 second quar­ter 2017 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. The web­cast will be available for 12 months after the con­fe­rence call.

About AMD
For more than 45 years, AMD has dri­ven inno­va­ti­on in high-per­for­mance com­pu­ting, gra­phics, and visua­liza­ti­on tech­no­lo­gies — the buil­ding blocks for gam­ing, immersi­ve plat­forms, and the dat­a­cen­ter. Hundreds of mil­li­ons of con­su­mers, lea­ding For­tu­ne 500 busi­nesses, and cut­ting-edge sci­en­ti­fic rese­arch faci­li­ties around the world rely on AMD tech­no­lo­gy dai­ly to impro­ve how they live, work, and play. AMD employees around the world are focu­sed on buil­ding gre­at pro­ducts that push the boun­da­ries of what is pos­si­ble. For more infor­ma­ti­on about how AMD is enab­ling today and inspi­ring tomor­row, visit the AMD (NASDAQ:AMD) web­site, blog, Face­book and Twit­terpages.

Cau­tio­na­ry Statement
This docu­ment con­ta­ins for­ward-loo­king state­ments con­cer­ning Advan­ced Micro Devices, Inc. (AMD) inclu­ding AMD’s expec­ted third quar­ter 2017 reve­nue and expec­ted fis­cal 2017 reve­nue; and the fea­tures, func­tion­a­li­ty, timing, avai­la­bi­li­ty, expec­ta­ti­ons and bene­fits of AMD future pro­ducts, 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 docu­ment are based on cur­rent beliefs, assump­ti­ons and expec­ta­ti­ons, speak only as of the date of this docu­ment 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 may limit AMD’s abili­ty to com­pe­te effec­tively; AMD has a wafer sup­p­ly agree­ment with GF with obli­ga­ti­ons to purcha­se all of its micro­pro­ces­sor and APU pro­duct requi­re­ments, and a cer­tain por­ti­on of its GPU pro­duct requi­re­ments from GLOBALFOUNDRIES Inc. (GF), with limi­t­ed excep­ti­ons. If GF is not able to satis­fy AMD’s manu­fac­tu­ring requi­re­ments, AMD’s busi­ness could be adver­se­ly impac­ted; AMD reli­es on third par­ties to manu­fac­tu­re its pro­ducts, and if they are unable to do so on a time­ly basis in suf­fi­ci­ent quan­ti­ties and using com­pe­ti­ti­ve tech­no­lo­gies, AMD’s busi­ness could be mate­ri­al­ly adver­se­ly affec­ted; fail­ure to achie­ve expec­ted manu­fac­tu­ring yields for AMD’s pro­ducts could nega­tively impact its finan­cial results; the suc­cess of AMD’s busi­ness is depen­dent upon its abili­ty to intro­du­ce pro­ducts on a time­ly basis with fea­tures and per­for­mance levels that pro­vi­de value to its cus­to­mers while sup­port­ing and coin­ci­ding with signi­fi­cant indus­try tran­si­ti­ons; if AMD can­not gene­ra­te suf­fi­ci­ent reve­nue and ope­ra­ting cash flow or obtain exter­nal finan­cing, it may face a cash short­fall and be unable to make all of its plan­ned invest­ments in rese­arch and deve­lo­p­ment or other stra­te­gic invest­ments; the loss of a signi­fi­cant cus­to­mer may have a mate­ri­al adver­se effect on AMD; AMD’s receipt of reve­nue from its semi-cus­tom SoC pro­ducts is depen­dent upon its tech­no­lo­gy being desi­gned into third-par­ty pro­ducts and the suc­cess of tho­se pro­ducts; glo­bal eco­no­mic uncer­tain­ty may adver­se­ly impact AMD’s busi­ness and ope­ra­ting results; the mar­kets in which AMD’s pro­ducts are sold are high­ly com­pe­ti­ti­ve; AMD may not be able to gene­ra­te suf­fi­ci­ent cash to ser­vice its debt obli­ga­ti­ons or meet its working capi­tal requi­re­ments; AMD has a sub­stan­ti­al amount of indeb­ted­ness which could adver­se­ly affect its finan­cial posi­ti­on and pre­vent it from imple­men­ting its stra­tegy or ful­fil­ling its con­trac­tu­al obli­ga­ti­ons; the agree­ments gover­ning AMD’s notes and the Secu­red Revol­ving Line of Cre­dit impo­se rest­ric­tions on AMD that may adver­se­ly affect its abili­ty to ope­ra­te its busi­ness; AMD’s issu­an­ce to West Coast Hitech L.P. (WCH) of war­rants to purcha­se 75 mil­li­on shares of its com­mon stock, if and when exer­cis­ed, will dilute the owner­ship inte­rests of its exis­ting stock­hol­ders, and the con­ver­si­on of the 2.125% Con­ver­ti­ble Seni­or Notes due 2026 may dilute the owner­ship inte­rest of its exis­ting stock­hol­ders, or may other­wi­se depress the pri­ce of its com­mon stock; uncer­tain­ties invol­ving the orde­ring and ship­ment of AMD’s pro­ducts could mate­ri­al­ly adver­se­ly affect it; the demand for AMD’s pro­ducts depends in part on the mar­ket con­di­ti­ons in the indus­tries into which they are sold. Fluc­tua­tions in demand for AMD’s pro­ducts or a mar­ket decli­ne in any of the­se indus­tries could have a mate­ri­al adver­se effect on its results of ope­ra­ti­ons; AMD’s abili­ty to design and intro­du­ce new pro­ducts in a time­ly man­ner is depen­dent upon third-par­ty intellec­tu­al pro­per­ty; AMD depends on third-par­ty com­pa­nies for the design, manu­fac­tu­re and sup­p­ly of mother­boards, soft­ware and other com­pu­ter plat­form com­pon­ents to sup­port its busi­ness; if AMD loses Micro­soft Corporation’s sup­port for its pro­ducts or other soft­ware ven­dors do not design and deve­lop soft­ware to run on AMD’s pro­ducts, its abili­ty to sell its pro­ducts could be mate­ri­al­ly adver­se­ly affec­ted; AMD’s reli­ance on third-par­ty dis­tri­bu­tors and AIB part­ners sub­jects it to cer­tain risks; AMD’s ina­bi­li­ty to con­ti­nue to attract and retain qua­li­fied per­son­nel may hin­der its busi­ness; in the event of a chan­ge of con­trol, AMD may not be able to repurcha­se its out­stan­ding debt as requi­red by the appli­ca­ble inden­tures and its Secu­red Revol­ving Line of Cre­dit, which would result in a default under the inden­tures and its Secu­red Revol­ving Line of Cre­dit; the semi­con­duc­tor indus­try is high­ly cycli­cal and has expe­ri­en­ced seve­re down­turns that have mate­ri­al­ly adver­se­ly affec­ted, and may con­ti­nue to mate­ri­al­ly adver­se­ly affect its busi­ness in the future; acqui­si­ti­ons, dives­ti­tures and/or joint ven­tures could dis­rupt its busi­ness, harm its finan­cial con­di­ti­on and ope­ra­ting results or dilute, or adver­se­ly affect the pri­ce of, its com­mon stock; AMD’s busi­ness is depen­dent upon the pro­per func­tio­ning of its inter­nal busi­ness pro­ces­ses and infor­ma­ti­on sys­tems and modi­fi­ca­ti­on or inter­rup­ti­on of such sys­tems may dis­rupt its busi­ness, pro­ces­ses and inter­nal con­trols; data brea­ches and cyber-attacks could com­pro­mi­se AMD’s intellec­tu­al pro­per­ty or other sen­si­ti­ve infor­ma­ti­on, be cos­t­ly to reme­dia­te and cau­se signi­fi­cant dama­ge to its busi­ness and repu­ta­ti­on; AMD’s ope­ra­ting results are sub­ject to quar­ter­ly and sea­so­nal sales pat­terns; if essen­ti­al equip­ment, mate­ri­als or manu­fac­tu­ring pro­ces­ses are not available to manu­fac­tu­re its pro­ducts, AMD could be mate­ri­al­ly adver­se­ly affec­ted; if AMD’s pro­ducts are not com­pa­ti­ble with some or all indus­try-stan­dard soft­ware and hard­ware, it could be mate­ri­al­ly adver­se­ly affec­ted; cos­ts rela­ted to defec­ti­ve pro­ducts could have a mate­ri­al adver­se effect on AMD; if AMD fails to main­tain the effi­ci­en­cy of its sup­p­ly chain as it responds to chan­ges in cus­to­mer demand for its pro­ducts, its busi­ness could be mate­ri­al­ly adver­se­ly affec­ted; AMD out­sour­ces to third par­ties cer­tain sup­p­ly-chain logi­stics func­tions, inclu­ding por­ti­ons of its pro­duct dis­tri­bu­ti­on, trans­por­ta­ti­on manage­ment and infor­ma­ti­on tech­no­lo­gy sup­port ser­vices; AMD may incur future impairm­ents of good­will; AMD’s stock pri­ce is sub­ject to vola­ti­li­ty; AMD’s world­wi­de ope­ra­ti­ons are sub­ject to poli­ti­cal, legal and eco­no­mic risks and natu­ral dis­as­ters, which could have a mate­ri­al adver­se effect on it; world­wi­de poli­ti­cal con­di­ti­ons may adver­se­ly affect demand for AMD’s pro­ducts; unfa­vorable cur­ren­cy exch­an­ge rate fluc­tua­tions could adver­se­ly affect AMD; AMD’s ina­bi­li­ty to effec­tively con­trol the sales of its pro­ducts on the gray mar­ket could have a mate­ri­al adver­se effect on it; if AMD can­not ade­qua­te­ly pro­tect its tech­no­lo­gy or other intellec­tu­al pro­per­ty in the United Sta­tes and abroad, through patents, copy­rights, trade secrets, trade­marks and other mea­su­res, it may lose a com­pe­ti­ti­ve advan­ta­ge and incur signi­fi­cant expen­ses; AMD is a par­ty to liti­ga­ti­on and may beco­me a par­ty to other claims or liti­ga­ti­on that could cau­se it to incur sub­stan­ti­al cos­ts or pay sub­stan­ti­al dama­ges or pro­hi­bit it from sel­ling its pro­ducts; AMD’s busi­ness is sub­ject to poten­ti­al tax lia­bi­li­ties; and AMD is sub­ject to envi­ron­men­tal laws, con­flict mine­rals-rela­ted pro­vi­si­ons of the Dodd-Frank Wall Street Reform and Con­su­mer Pro­tec­tion Act as well as a varie­ty of other laws or regu­la­ti­ons that could result in addi­tio­nal cos­ts and lia­bi­li­ties.  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 Quar­ter­ly Report on Form 10‑Q for the quar­ter ended April 1, 2017.

AMD, the AMD Arrow logo, AMD Ryzen, AMD Rade­on and com­bi­na­ti­ons the­reof, are trade­marks of Advan­ced Micro Devices, Inc. Other names are for infor­ma­tio­nal pur­po­ses only and used to iden­ti­fy com­pa­nies and pro­ducts and may be trade­marks of their respec­ti­ve owner.

1. In this ear­nings press release, in addi­ti­on to GAAP finan­cial results, AMD has pro­vi­ded non-GAAP finan­cial mea­su­res inclu­ding non-GAAP gross mar­gin, non-GAAP ope­ra­ting inco­me (loss), non-GAAP net inco­me (loss) and non-GAAP ear­nings (loss) per share. The­se non-GAAP finan­cial mea­su­res reflect cer­tain adjus­t­ments as pre­sen­ted in the tables in this ear­nings press release. 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. Refer to the data tables at the end of this ear­nings press release.

Media Contact
Drew Prairie
512-602-4425
drew.prairie@amd.com

Investor Contact
Laura Graves
408-749-5467
laura.graves@amd.com

Advan­ced Micro Devices