AMD (NASDAQ:AMD) today announced revenue for the third quarter of
2023 of $5.8 billion, gross margin of 47%, operating income of $224
million, net income of $299 million and diluted earnings per share
of $0.18. On a non-GAAP(*) basis, gross margin was 51%, operating
income was $1.3 billion, net income was $1.1 billion and diluted
earnings per share was $0.70.
“We delivered strong revenue and earnings growth driven by
demand for our Ryzen 7000 series PC processors and record server
processor sales,” said AMD Chair and CEO Dr. Lisa Su. “Our data
center business is on a significant growth trajectory based on the
strength of our EPYC CPU portfolio and the ramp of Instinct MI300
accelerator shipments to support multiple deployments with
hyperscale, enterprise and AI customers.”
“We executed well in the third quarter, delivering
year-over-year growth in revenue, gross margin and earnings per
share,” said AMD EVP, CFO and Treasurer Jean Hu. “In the fourth
quarter, we expect to see strong growth in Data Center and
continued momentum in Client, partially offset by lower sales in
the Gaming segment and additional softening of demand in the
embedded markets.”
GAAP Quarterly Financial
Results
|
Q3 2023 |
Q3 2022 |
Y/Y |
Q2 2023 |
Q/Q |
Revenue ($M) |
$5,800 |
$5,565 |
Up 4% |
$5,359 |
Up 8% |
Gross profit ($M) |
$2,747 |
$2,354 |
Up 17% |
$2,443 |
Up 12% |
Gross margin |
47% |
42% |
Up 5 ppts |
46% |
Up 1 ppt |
Operating expenses ($M) |
$2,533 |
$2,426 |
Up 4% |
$2,471 |
Up 3% |
Operating income (loss) ($M) |
$224 |
$(64) |
Up 450% |
$(20) |
Up 1,220% |
Operating margin |
4% |
(1%) |
Up 5 ppts |
0% |
Up 4 ppts |
Net income ($M) |
$299 |
$66 |
Up 353% |
$27 |
Up 1,007% |
Diluted earnings per share |
$0.18 |
$0.04 |
Up 350% |
$0.02 |
Up 800% |
Non-GAAP(*) Quarterly Financial
Results
|
Q3 2023 |
Q3 2022 |
Y/Y |
Q2 2023 |
Q/Q |
Revenue ($M) |
$5,800 |
$5,565 |
Up 4% |
$5,359 |
Up 8% |
Gross profit ($M) |
$2,963 |
$2,776 |
Up 7% |
$2,665 |
Up 11% |
Gross margin |
51% |
50% |
Up 1 ppt |
50% |
Up 1 ppt |
Operating expenses ($M) |
$1,697 |
$1,520 |
Up 12% |
$1,605 |
Up 6% |
Operating income ($M) |
$1,276 |
$1,264 |
Flat |
$1,068 |
Up 19% |
Operating margin |
22% |
23% |
Down 1 ppt |
20% |
Up 2 ppts |
Net income ($M) |
$1,135 |
$1,095 |
Up 4% |
$948 |
Up 20% |
Diluted earnings per share |
$0.70 |
$0.67 |
Up 4% |
$0.58 |
Up 21% |
Quarterly Segment Summary
- Data Center segment revenue was $1.6
billion, flat year-over-year, as growth in 4th Gen AMD EPYC™ CPU
sales was offset by a decline in adaptive System-on-Chip (SoC) data
center products.
- Revenue increased 21% sequentially
as customer adoption of 4th Gen AMD EPYC CPUs accelerated during
the quarter.
- AMD Instinct™ MI300A and MI300X GPUs
are on track for volume production in the fourth quarter to support
deployments with several leading HPC, cloud and AI customers.
- Client segment revenue was $1.5
billion, up 42% year-over-year driven primarily by higher Ryzen
mobile processor sales.
- Revenue grew 46% sequentially driven
by an increase in AMD Ryzen™ 7000 Series CPU sales.
- Gaming segment revenue was $1.5
billion, down 8% year-over-year, primarily due to a decline in
semi-custom revenue, partially offset by an increase in AMD Radeon™
GPU sales.
- Revenue declined 5% sequentially due
to lower semi-custom sales.
- Embedded segment revenue was $1.2
billion, down 5% year-over-year primarily due to a decrease in
revenue in the communications market.
- Revenue decreased 15% sequentially
due to inventory correction at customers in several end
markets.
Recent PR Highlights
- Cloud adoption of AMD EPYC
processors continues to grow significantly, with nearly 100 new
instances from Microsoft Azure, AWS, Oracle and others available
for preview and general access, including new AWS instances powered
by 4th Gen AMD EPYC CPUs that deliver leadership performance and
energy efficiency.
- AMD expanded the 4th Gen EPYC CPU
portfolio with the launch of the AMD EPYC 8004 Series processors,
purpose built to deliver exceptional energy efficiency and
performance for cloud services, intelligent edge and telco.
- AMD made significant progress
powering pervasive AI across the cloud, edge and end point devices:
- AMD completed the acquisition of
open-source AI software expert Nod.ai, expanding the company’s open
AI software capabilities. Nod.ai has developed an industry-leading
software technology that accelerates the deployment of AI solutions
optimized for AMD Instinct data center accelerators, Ryzen AI
processors, EPYC processors, Versal™ SoCs and Radeon GPUs.
- AMD acquired AI software leader
Mipsology. With proven expertise delivering AI software and
solutions running on top of AMD adaptive computing silicon, the
Mipsology team will help develop the full AMD AI software stack and
expand the open ecosystem of software tools, libraries and
models.
- AI startup Lamini unveiled that it
has been running production-ready Large Language Models (LLMs)
exclusively on AMD Instinct accelerators, enabling enterprise
customers to deploy LLMs finetuned for their specific data across
hundreds of AMD Instinct MI250 GPUs with only three lines of
code.
- AMD expanded its AMD Ryzen processor
lineup, delivering more performance and capabilities for
enthusiasts, gamers and creators:
- AMD announced the AMD Ryzen
Threadripper™ PRO 7000 WX-Series and Ryzen Threadripper 7000
processors, delivering outstanding performance for the most
demanding desktop platforms. Ryzen Threadripper PRO 7000 WX-Series
processors will be available later this year to DIY customers, SI
partners and through OEM partners including Dell Technologies, HP
and Lenovo.
- AMD launched new Ryzen 7045HX3D
Series mobile processors, the first mobile processor with AMD 3D
V-Cache™ technology, and the world’s fastest mobile gaming
processor.
- AMD launched the AMD Ryzen 5 5600X3D
processor, delivering incredible gaming performance with AMD 3D
V-cache technology.
- Leadership AMD adaptive and embedded computing products are
enabling new capabilities in key markets:
- AMD extended its leadership in radiation-tolerant, space-grade
compute solutions with the announcement of the Versal AI Edge
XQRVE2302, the second device in the Versal adaptive SoC portfolio
to be qualified for space flight.
- AMD announced the AMD Alveo™ UL3524 accelerator card, a new
fintech accelerator designed for electronic trading applications
and AI-enabled trading strategies.
- AMD announced the AMD Kria™ K24 System-on-Module (SOM) and
KD240 Drives Starter Kit, offering power-efficient compute in a
small form factor for cost-sensitive industrial and commercial edge
applications.
- New AMD graphics processors and
software features are enabling incredible experiences for gamers
and professionals:
- AMD introduced the flagship laptop
graphics processor, AMD Radeon RX 7900M, the fastest AMD Radeon GPU
ever developed for laptops, delivering desktop-class performance
for gaming and content creation.
- AMD launched the Radeon RX 7800 XT
and Radeon RX 7700 XT graphics cards, optimized to deliver
incredibly high-performance, high-refresh 1440p gaming experiences
for demanding AAA and esports titles.
- AMD launched FidelityFX™ Super
Resolution 3 in Forspoken and Immortals of Aveum, featuring new
frame generation technology that delivers massive performance
improvements over both native resolution and temporal
upscaling.
- AMD launched the latest version of
the AMD Software: Adrenalin Edition application featuring AMD
HYPR-RX technology, allowing AMD Radeon Super Resolution and AMD
Radeon Boost technologies to work together to deliver greater
performance.
- AMD launched the Radeon PRO W7600
and Radeon PRO W7500 workstation graphics cards, engineered to
tackle workloads across a range of professional industries.
- AMD published its annual Corporate
Responsibility Report, detailing 2022 progress across focus areas
spanning digital impact, environmental sustainability, supply chain
responsibility, and diversity, belonging and inclusion.
- AMD announced plans to invest
approximately $400 million over the next five years to expand
research, development and engineering operations in India,
including the addition of approximately 3,000 new engineering roles
by the end of 2028.
Current OutlookAMD’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 fourth quarter of 2023, AMD expects revenue to be
approximately $6.1 billion, plus or minus $300 million. At the
mid-point of the revenue range, this represents year-over-year
growth of approximately 9% and sequential growth of approximately
5%. Non-GAAP gross margin is expected to be approximately
51.5%.
AMD TeleconferenceAMD will hold a conference
call for the financial community at 2:00 p.m. PT (5:00 p.m. ET)
today to discuss its third quarter 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 |
|
|
September 30,2023 |
|
July 1,2023 |
|
September 24,2022 |
|
GAAP gross
profit |
|
$ |
2,747 |
|
|
$ |
2,443 |
|
|
$ |
2,354 |
|
|
GAAP gross margin |
|
|
47 |
% |
|
|
46 |
% |
|
|
42 |
% |
|
Stock-based compensation |
|
|
6 |
|
|
|
10 |
|
|
|
8 |
|
|
Amortization of acquisition-related intangibles |
|
|
210 |
|
|
|
212 |
|
|
|
412 |
|
|
Acquisition-related and other costs (1) |
|
|
— |
|
|
|
— |
|
|
|
2 |
|
|
Non-GAAP gross
profit |
|
$ |
2,963 |
|
|
$ |
2,665 |
|
|
$ |
2,776 |
|
|
Non-GAAP gross margin |
|
|
51 |
% |
|
|
50 |
% |
|
|
50 |
% |
|
|
|
|
|
|
|
|
|
GAAP operating
expenses |
|
$ |
2,533 |
|
|
$ |
2,471 |
|
|
$ |
2,426 |
|
|
GAAP operating expenses/revenue % |
|
|
44 |
% |
|
|
46 |
% |
|
|
44 |
% |
|
Stock-based compensation |
|
|
347 |
|
|
|
338 |
|
|
|
261 |
|
|
Amortization of acquisition-related intangibles |
|
|
450 |
|
|
|
481 |
|
|
|
590 |
|
|
Acquisition-related and other costs (1) |
|
|
39 |
|
|
|
47 |
|
|
|
55 |
|
|
Non-GAAP operating
expenses |
|
$ |
1,697 |
|
|
$ |
1,605 |
|
|
$ |
1,520 |
|
|
Non-GAAP operating expenses/revenue % |
|
|
29 |
% |
|
|
30 |
% |
|
|
27 |
% |
|
|
|
|
|
|
|
|
|
GAAP operating income
(loss) |
|
$ |
224 |
|
|
$ |
(20 |
) |
|
$ |
(64 |
) |
|
GAAP operating margin |
|
|
4 |
% |
|
|
0 |
% |
|
|
(1) |
)% |
|
Stock-based compensation |
|
|
353 |
|
|
|
348 |
|
|
|
269 |
|
|
Amortization of acquisition-related intangibles |
|
|
660 |
|
|
|
693 |
|
|
|
1,002 |
|
|
Acquisition-related and other costs (1) |
|
|
39 |
|
|
|
47 |
|
|
|
57 |
|
|
Non-GAAP operating
income |
|
$ |
1,276 |
|
|
$ |
1,068 |
|
|
$ |
1,264 |
|
|
Non-GAAP operating margin |
|
|
22 |
% |
|
|
20 |
% |
|
|
23 |
% |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
September 30,2023 |
|
July 1,2023 |
|
September 24,2022 |
|
GAAP net income /
diluted earnings per share |
|
$ |
299 |
|
|
$ |
0.18 |
|
|
$ |
27 |
|
|
$ |
0.02 |
|
|
$ |
66 |
|
|
$ |
0.04 |
|
|
(Gains) losses on equity investments, net |
|
|
(4 |
) |
|
|
— |
|
|
|
3 |
|
|
|
— |
|
|
|
3 |
|
|
|
— |
|
|
Stock-based compensation |
|
|
353 |
|
|
|
0.22 |
|
|
|
348 |
|
|
|
0.21 |
|
|
|
269 |
|
|
|
0.16 |
|
|
Equity income in investee |
|
|
(3 |
) |
|
|
— |
|
|
|
(6 |
) |
|
|
— |
|
|
|
(4 |
) |
|
|
— |
|
|
Amortization of acquisition-related intangibles |
|
|
660 |
|
|
|
0.41 |
|
|
|
693 |
|
|
|
0.42 |
|
|
|
1,002 |
|
|
|
0.62 |
|
|
Acquisition-related and other costs (1) |
|
|
39 |
|
|
|
0.02 |
|
|
|
47 |
|
|
|
0.03 |
|
|
|
57 |
|
|
|
0.04 |
|
|
Income tax provision |
|
|
(209 |
) |
|
|
(0.13 |
) |
|
|
(164 |
) |
|
|
(0.10 |
) |
|
|
(298 |
) |
|
|
(0.19 |
) |
|
Non-GAAP net income /
diluted earnings per share |
|
$ |
1,135 |
|
|
$ |
0.70 |
|
|
$ |
948 |
|
|
$ |
0.58 |
|
|
$ |
1,095 |
|
|
$ |
0.67 |
|
|
(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 AMDFor 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: AMD) website,
blog, Facebook and Twitter pages.
Cautionary Statement
This press release contains forward-looking
statements concerning Advanced Micro Devices, Inc. (AMD) such as
the significant growth trajectory of AMD’s data center business;
that AMD expects to see strong growth in Data Center and continued
momentum in Client, partially offset by lower sales in the Gaming
segment and additional softening of demand in the embedded markets;
that AMD Instinct™ MI300A and MI300X GPUs are on track for volume
production in the fourth quarter of 2023 to support deployments
with several leading HPC, Cloud and AI customers; the features,
functionality, performance, availability, timing and expected
benefits of AMD products; AMD’s plans to invest approximately $400
million over the next five years to expand research, development
and engineering operations in India, including the addition of
approximately 3,000 new engineering roles by the end of 2028; and
AMD’s expected fourth quarter 2023 financial outlook, including
revenue and non-GAAP gross margin, 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; global 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 upgrading and operating AMD’s new 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 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
administration 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 AMD’s tangible,
definite-lived or indefinite-lived intangible assets, including
goodwill, on AMD’s financial position and results of operation;
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, as well as the impact of financial
institution failure on AMD’s cash and cash equivalents; political,
legal, economic risks and natural disasters; future impairments of
technology license purchases; AMD’s ability to attract and retain
qualified personnel; 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 uses a projected
non-GAAP tax rate of 13%, which excludes the tax impact of pre-tax
non-GAAP adjustments, reflecting currently available information.
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 October 31,
2023 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 |
|
Nine Months Ended |
|
September 30,2023 |
|
July 1,2023 |
|
September 24,2022 |
|
September 30,2023 |
|
September 24,2022 |
Net revenue |
$ |
5,800 |
|
|
$ |
5,359 |
|
|
$ |
5,565 |
|
|
$ |
16,512 |
|
|
$ |
18,002 |
|
Cost of sales |
|
2,843 |
|
|
|
2,704 |
|
|
|
2,799 |
|
|
|
8,236 |
|
|
|
8,797 |
|
Amortization of
acquisition-related intangibles |
|
210 |
|
|
|
212 |
|
|
|
412 |
|
|
|
727 |
|
|
|
1,005 |
|
Total cost of sales |
|
3,053 |
|
|
|
2,916 |
|
|
|
3,211 |
|
|
|
8,963 |
|
|
|
9,802 |
|
Gross profit |
|
2,747 |
|
|
|
2,443 |
|
|
|
2,354 |
|
|
|
7,549 |
|
|
|
8,200 |
|
Gross margin |
|
47 |
% |
|
|
46 |
% |
|
|
42 |
% |
|
|
46 |
% |
|
|
46 |
% |
Research and development |
|
1,507 |
|
|
|
1,443 |
|
|
|
1,279 |
|
|
|
4,361 |
|
|
|
3,639 |
|
Marketing, general and
administrative |
|
576 |
|
|
|
547 |
|
|
|
557 |
|
|
|
1,708 |
|
|
|
1,746 |
|
Amortization of
acquisition-related intangibles |
|
450 |
|
|
|
481 |
|
|
|
590 |
|
|
|
1,449 |
|
|
|
1,499 |
|
Licensing gain |
|
(10 |
) |
|
|
(8 |
) |
|
|
(8 |
) |
|
|
(28 |
) |
|
|
(97 |
) |
Operating income (loss) |
|
224 |
|
|
|
(20 |
) |
|
|
(64 |
) |
|
|
59 |
|
|
|
1,413 |
|
Interest expense |
|
(26 |
) |
|
|
(28 |
) |
|
|
(31 |
) |
|
|
(79 |
) |
|
|
(69 |
) |
Other income (expense),
net |
|
59 |
|
|
|
46 |
|
|
|
22 |
|
|
|
148 |
|
|
|
(24 |
) |
Income (loss) before income taxes and equity income |
|
257 |
|
|
|
(2 |
) |
|
|
(73 |
) |
|
|
128 |
|
|
|
1,320 |
|
Income tax provision
(benefit) |
|
(39 |
) |
|
|
(23 |
) |
|
|
(135 |
) |
|
|
(49 |
) |
|
|
32 |
|
Equity income in investee |
|
3 |
|
|
|
6 |
|
|
|
4 |
|
|
|
10 |
|
|
|
11 |
|
Net income |
$ |
299 |
|
|
$ |
27 |
|
|
$ |
66 |
|
|
$ |
187 |
|
|
$ |
1,299 |
|
Earnings per share |
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.18 |
|
|
$ |
0.02 |
|
|
$ |
0.04 |
|
|
$ |
0.12 |
|
|
$ |
0.84 |
|
Diluted |
$ |
0.18 |
|
|
$ |
0.02 |
|
|
$ |
0.04 |
|
|
$ |
0.11 |
|
|
$ |
0.84 |
|
Shares used in per share
calculation |
|
|
|
|
|
|
|
|
|
Basic |
|
1,616 |
|
|
|
1,612 |
|
|
|
1,615 |
|
|
|
1,613 |
|
|
|
1,542 |
|
Diluted |
|
1,629 |
|
|
|
1,627 |
|
|
|
1,625 |
|
|
|
1,625 |
|
|
|
1,555 |
|
ADVANCED MICRO DEVICES, INC.CONDENSED
CONSOLIDATED BALANCE SHEETS(Millions)
|
September 30,2023 |
|
December 31,2022 |
|
(Unaudited) |
|
|
ASSETS |
|
|
|
Current
assets: |
|
|
|
Cash and cash equivalents |
$ |
3,561 |
|
|
$ |
4,835 |
|
Short-term investments |
|
2,224 |
|
|
|
1,020 |
|
Accounts receivable, net |
|
5,054 |
|
|
|
4,126 |
|
Inventories |
|
4,445 |
|
|
|
3,771 |
|
Receivables from related parties |
|
1 |
|
|
|
2 |
|
Prepaid expenses and other current assets |
|
1,403 |
|
|
|
1,265 |
|
Total current
assets |
|
16,688 |
|
|
|
15,019 |
|
Property and equipment,
net |
|
1,566 |
|
|
|
1,513 |
|
Operating lease right-of-use
assets |
|
507 |
|
|
|
460 |
|
Goodwill |
|
24,186 |
|
|
|
24,177 |
|
Acquisition-related
intangibles, net |
|
21,950 |
|
|
|
24,118 |
|
Investment: equity method |
|
93 |
|
|
|
83 |
|
Deferred tax assets |
|
76 |
|
|
|
58 |
|
Other non-current assets |
|
2,560 |
|
|
|
2,152 |
|
Total
Assets |
$ |
67,626 |
|
|
$ |
67,580 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Accounts payable |
$ |
2,245 |
|
|
$ |
2,493 |
|
Payables to related parties |
|
325 |
|
|
|
463 |
|
Accrued liabilities |
|
3,376 |
|
|
|
3,077 |
|
Current portion of long-term debt, net |
|
752 |
|
|
|
— |
|
Other current liabilities |
|
929 |
|
|
|
336 |
|
Total current
liabilities |
|
7,627 |
|
|
|
6,369 |
|
Long-term debt, net of current
portion |
|
1,715 |
|
|
|
2,467 |
|
Long-term operating lease
liabilities |
|
395 |
|
|
|
396 |
|
Deferred tax liabilities |
|
1,152 |
|
|
|
1,934 |
|
Other long-term
liabilities |
|
1,767 |
|
|
|
1,664 |
|
|
|
|
|
Stockholders'
equity: |
|
|
|
Capital stock: |
|
|
|
Common stock, par value |
|
17 |
|
|
|
16 |
|
Additional paid-in capital |
|
59,182 |
|
|
|
58,005 |
|
Treasury stock, at cost |
|
(4,235 |
) |
|
|
(3,099 |
) |
Retained earnings (Accumulated
deficit) |
|
56 |
|
|
|
(131 |
) |
Accumulated other
comprehensive loss |
|
(50 |
) |
|
|
(41 |
) |
Total stockholders'
equity |
$ |
54,970 |
|
|
$ |
54,750 |
|
Total Liabilities and
Stockholders' Equity |
$ |
67,626 |
|
|
$ |
67,580 |
|
ADVANCED MICRO DEVICES, INC.CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS(Millions)
(Unaudited)
|
Three Months Ended |
|
Nine Months Ended |
|
September 30,2023 |
|
September 24,2022 |
|
September 30,2023 |
|
September 24,2022 |
Cash flows from operating
activities: |
|
|
|
|
|
|
|
Net income |
$ |
299 |
|
|
$ |
66 |
|
|
$ |
187 |
|
|
$ |
1,299 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
823 |
|
|
|
1,165 |
|
|
|
2,654 |
|
|
|
2,954 |
|
Stock-based compensation |
|
353 |
|
|
|
275 |
|
|
|
1,010 |
|
|
|
766 |
|
Amortization of operating lease right-of-use assets |
|
25 |
|
|
|
23 |
|
|
|
73 |
|
|
|
63 |
|
Amortization of inventory fair value adjustment |
|
— |
|
|
|
2 |
|
|
|
3 |
|
|
|
187 |
|
Loss on sale or disposal of property and equipment |
|
3 |
|
|
|
— |
|
|
|
10 |
|
|
|
15 |
|
Deferred income taxes |
|
(218 |
) |
|
|
(710 |
) |
|
|
(800 |
) |
|
|
(1,328 |
) |
(Gains) losses on equity investments, net |
|
(3 |
) |
|
|
3 |
|
|
|
(1 |
) |
|
|
57 |
|
Other |
|
(23 |
) |
|
|
(5 |
) |
|
|
(43 |
) |
|
|
(9 |
) |
Changes in operating assets and liabilities |
|
|
|
|
|
|
|
Accounts receivable, net |
|
(743 |
) |
|
|
(285 |
) |
|
|
(929 |
) |
|
|
(1,301 |
) |
Inventories |
|
122 |
|
|
|
(723 |
) |
|
|
(674 |
) |
|
|
(997 |
) |
Receivables from related parties |
|
1 |
|
|
|
— |
|
|
|
1 |
|
|
|
(1 |
) |
Prepaid expenses and other assets |
|
(143 |
) |
|
|
(588 |
) |
|
|
(380 |
) |
|
|
(825 |
) |
Payables to related parties |
|
13 |
|
|
|
36 |
|
|
|
(137 |
) |
|
|
313 |
|
Accounts payable |
|
(547 |
) |
|
|
783 |
|
|
|
(238 |
) |
|
|
811 |
|
Accrued and other liabilities |
|
459 |
|
|
|
923 |
|
|
|
550 |
|
|
|
994 |
|
Net cash provided by operating
activities |
|
421 |
|
|
|
965 |
|
|
|
1,286 |
|
|
|
2,998 |
|
Cash flows from investing
activities: |
|
|
|
|
|
|
|
Purchases of property and equipment |
|
(124 |
) |
|
|
(123 |
) |
|
|
(407 |
) |
|
|
(326 |
) |
Purchases of short-term investments |
|
(496 |
) |
|
|
(1,779 |
) |
|
|
(3,312 |
) |
|
|
(2,399 |
) |
Proceeds from maturity of short-term investments |
|
746 |
|
|
|
615 |
|
|
|
1,917 |
|
|
|
2,864 |
|
Proceeds from sale of short-term investments |
|
— |
|
|
|
— |
|
|
|
248 |
|
|
|
— |
|
Cash received from acquisition of Xilinx |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,366 |
|
Acquisitions, net of cash acquired |
|
(14 |
) |
|
|
— |
|
|
|
(14 |
) |
|
|
(1,558 |
) |
Other |
|
(10 |
) |
|
|
(11 |
) |
|
|
(5 |
) |
|
|
(15 |
) |
Net cash provided by (used in)
investing activities |
|
102 |
|
|
|
(1,298 |
) |
|
|
(1,573 |
) |
|
|
932 |
|
Cash flows from financing
activities: |
|
|
|
|
|
|
|
Proceeds from debt, net of issuance costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
991 |
|
Repayment of debt |
|
— |
|
|
|
(312 |
) |
|
|
— |
|
|
|
(312 |
) |
Proceeds from sales of common stock through employee equity
plans |
|
4 |
|
|
|
1 |
|
|
|
148 |
|
|
|
79 |
|
Repurchases of common stock |
|
(511 |
) |
|
|
(617 |
) |
|
|
(752 |
) |
|
|
(3,452 |
) |
Common stock repurchases for tax withholding on employee equity
plans |
|
(295 |
) |
|
|
(305 |
) |
|
|
(382 |
) |
|
|
(371 |
) |
Other |
|
(1 |
) |
|
|
— |
|
|
|
(1 |
) |
|
|
(2 |
) |
Net cash used in financing
activities |
|
(803 |
) |
|
|
(1,233 |
) |
|
|
(987 |
) |
|
|
(3,067 |
) |
Net increase (decrease) in
cash and cash equivalents |
|
(280 |
) |
|
|
(1,566 |
) |
|
|
(1,274 |
) |
|
|
863 |
|
Cash and cash equivalents at
beginning of period |
|
3,841 |
|
|
|
4,964 |
|
|
|
4,835 |
|
|
|
2,535 |
|
Cash and cash equivalents at
end of period |
$ |
3,561 |
|
|
$ |
3,398 |
|
|
$ |
3,561 |
|
|
$ |
3,398 |
|
ADVANCED MICRO DEVICES, INC.SELECTED
CORPORATE DATA(Millions) (Unaudited)
|
Three Months Ended |
|
Nine Months Ended |
|
September 30,2023 |
|
July 1,2023 |
|
September 24,2022 |
|
September 30,2023 |
|
September 24,2022 |
Segment and Category
Information(1) |
|
|
|
|
|
|
|
|
|
Data Center |
|
|
|
|
|
|
|
|
|
Net revenue |
$ |
1,598 |
|
|
$ |
1,321 |
|
|
$ |
1,609 |
|
|
$ |
4,214 |
|
|
$ |
4,388 |
|
Operating income |
$ |
306 |
|
|
$ |
147 |
|
|
$ |
505 |
|
|
$ |
601 |
|
|
$ |
1,404 |
|
Client |
|
|
|
|
|
|
|
|
|
Net revenue |
$ |
1,453 |
|
|
$ |
998 |
|
|
$ |
1,022 |
|
|
$ |
3,190 |
|
|
$ |
5,298 |
|
Operating income (loss) |
$ |
140 |
|
|
$ |
(69 |
) |
|
$ |
(26 |
) |
|
$ |
(101 |
) |
|
$ |
1,342 |
|
Gaming |
|
|
|
|
|
|
|
|
|
Net revenue |
$ |
1,506 |
|
|
$ |
1,581 |
|
|
$ |
1,631 |
|
|
$ |
4,844 |
|
|
$ |
5,161 |
|
Operating income |
$ |
208 |
|
|
$ |
225 |
|
|
$ |
142 |
|
|
$ |
747 |
|
|
$ |
687 |
|
Embedded |
|
|
|
|
|
|
|
|
|
Net revenue |
$ |
1,243 |
|
|
$ |
1,459 |
|
|
$ |
1,303 |
|
|
$ |
4,264 |
|
|
$ |
3,155 |
|
Operating income |
$ |
612 |
|
|
$ |
757 |
|
|
$ |
635 |
|
|
$ |
2,167 |
|
|
$ |
1,553 |
|
All Other |
|
|
|
|
|
|
|
|
|
Net revenue |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Operating loss |
$ |
(1,042 |
) |
|
$ |
(1,080 |
) |
|
$ |
(1,320 |
) |
|
$ |
(3,355 |
) |
|
$ |
(3,573 |
) |
Total |
|
|
|
|
|
|
|
|
|
Net revenue |
$ |
5,800 |
|
|
$ |
5,359 |
|
|
$ |
5,565 |
|
|
$ |
16,512 |
|
|
$ |
18,002 |
|
Operating income (loss) |
$ |
224 |
|
|
$ |
(20 |
) |
|
$ |
(64 |
) |
|
$ |
59 |
|
|
$ |
1,413 |
|
|
|
|
|
|
|
|
|
|
|
Other
Data |
|
|
|
|
|
|
|
|
|
Capital expenditures |
$ |
124 |
|
|
$ |
125 |
|
|
$ |
123 |
|
|
$ |
407 |
|
|
$ |
326 |
|
Adjusted EBITDA (2) |
$ |
1,439 |
|
|
$ |
1,224 |
|
|
$ |
1,427 |
|
|
$ |
3,920 |
|
|
$ |
5,533 |
|
Cash, cash equivalents and
short-term investments |
$ |
5,785 |
|
|
$ |
6,285 |
|
|
$ |
5,591 |
|
|
$ |
5,785 |
|
|
$ |
5,591 |
|
Free cash flow (3) |
$ |
297 |
|
|
$ |
254 |
|
|
$ |
842 |
|
|
$ |
879 |
|
|
$ |
2,672 |
|
Total assets |
$ |
67,626 |
|
|
$ |
67,967 |
|
|
$ |
67,811 |
|
|
$ |
67,626 |
|
|
$ |
67,811 |
|
Total debt |
$ |
2,467 |
|
|
$ |
2,467 |
|
|
$ |
2,466 |
|
|
$ |
2,467 |
|
|
$ |
2,466 |
|
(1) |
The Data Center segment primarily includes server microprocessors
(CPUs) and graphics processing units (GPUs), data processing units
(DPUs), Field Programmable Gate Arrays (FPGAs) and Adaptive
System-on-Chip (SoC) products for data centers. |
|
|
|
The Client segment primarily
includes CPUs, accelerated processing units that integrate
microprocessors and GPUs (APUs), and chipsets for desktop and
notebook personal computers. |
|
|
|
The Gaming segment primarily
includes discrete GPUs, semi-custom SoC products and development
services. |
|
|
|
The Embedded segment primarily
includes embedded CPUs and GPUs, APUs, FPGAs, 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 |
|
Nine Months Ended |
|
September 30,2023 |
|
July 1,2023 |
|
September 24,2022 |
|
September 30,2023 |
|
September 24,2022 |
GAAP net income |
$ |
299 |
|
|
$ |
27 |
|
|
$ |
66 |
|
|
$ |
187 |
|
|
$ |
1,299 |
|
Interest expense |
|
26 |
|
|
|
28 |
|
|
|
31 |
|
|
|
79 |
|
|
|
69 |
|
Other (income) expense, net |
|
(59 |
) |
|
|
(46 |
) |
|
|
(22 |
) |
|
|
(148 |
) |
|
|
24 |
|
Income tax provision (benefit) |
|
(39 |
) |
|
|
(23 |
) |
|
|
(135 |
) |
|
|
(49 |
) |
|
|
32 |
|
Equity income in investee |
|
(3 |
) |
|
|
(6 |
) |
|
|
(4 |
) |
|
|
(10 |
) |
|
|
(11 |
) |
Stock-based compensation |
|
353 |
|
|
|
348 |
|
|
|
269 |
|
|
|
1,006 |
|
|
|
702 |
|
Depreciation and amortization |
|
163 |
|
|
|
156 |
|
|
|
163 |
|
|
|
478 |
|
|
|
450 |
|
Amortization of acquisition-related intangibles |
|
660 |
|
|
|
693 |
|
|
|
1,002 |
|
|
|
2,176 |
|
|
|
2,504 |
|
Acquisition-related and other costs |
|
39 |
|
|
|
47 |
|
|
|
57 |
|
|
|
201 |
|
|
|
464 |
|
Adjusted EBITDA |
$ |
1,439 |
|
|
$ |
1,224 |
|
|
$ |
1,427 |
|
|
$ |
3,920 |
|
|
$ |
5,533 |
|
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 provision (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 |
|
Nine Months Ended |
|
September 30,2023 |
|
July 1,2023 |
|
September 24,2022 |
|
September 30,2023 |
|
September 24,2022 |
GAAP net cash provided by operating activities |
$ |
421 |
|
|
$ |
379 |
|
|
$ |
965 |
|
|
$ |
1,286 |
|
|
$ |
2,998 |
|
Operating cash flow margin % |
|
7 |
% |
|
|
7 |
% |
|
|
17 |
% |
|
|
8 |
% |
|
|
17 |
% |
Purchases of property and equipment |
$ |
(124 |
) |
|
$ |
(125 |
) |
|
$ |
(123 |
) |
|
$ |
(407 |
) |
|
$ |
(326 |
) |
Free cash flow |
$ |
297 |
|
|
$ |
254 |
|
|
$ |
842 |
|
|
$ |
879 |
|
|
$ |
2,672 |
|
Free cash flow margin % |
|
5 |
% |
|
|
5 |
% |
|
|
15 |
% |
|
|
5 |
% |
|
|
15 |
% |
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. |
Media Contact:Drew PrairieAMD
Communications512-602-4425drew.prairie@amd.com Investor
Contact:Mitch HawsAMD Investor
Relations408-749-3124mitch.haws@amd.com
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