GAAP Quarterly Financial ResultsNon-GAAP* Quarterly Financial Results“Our business accelerated in the third quarter as strong demand for our PC, gaming and data center products drove record quarterly revenue,” said Dr. Lisa Su, AMD president and CEO. “We reported our fourth straight quarter with greater than 25 percent year-over-year revenue growth, highlighting our significant customer momentum. We are well positioned to continue delivering best-in-class growth as we further extend our leadership product portfolio with the launches of our next generation Ryzen, Radeon and EPYC processors.”Q3 2020 ResultsRevenue was $2.80 billion, up 56 percent year-over-year and 45 percent quarter-over-quarter driven by higher revenue in both the Enterprise, Embedded and Semi-Custom and Computing and Graphics segments.Gross margin was 44 percent, up 1 percentage point year-over-year and flat quarter-over-quarter. The year-over-year increase was primarily driven by EPYC™ and Ryzen™ processor sales. Gross margin was flat quarter-over-quarter as an increase of Ryzen and EPYC processor sales was offset by a higher percentage of semi-custom revenue.Operating income was $449 million compared to $186 million a year ago and $173 million in the prior quarter. Non-GAAP operating income was $525 million compared to $240 million a year ago and $233 million in the prior quarter. Operating income improvements were primarily driven by revenue growth, including an increase in Ryzen and EPYC processor sales and semi-custom product sales.Net income was $390 million compared to $120 million a year ago and $157 million in the prior quarter. Non-GAAP net income was $501 million compared to $219 million a year ago and $216 million in the prior quarter.Diluted earnings per share was $0.32 compared to $0.11 a year ago and $0.13 in the prior quarter. Non-GAAP diluted earnings per share was $0.41 compared to $0.18 a year ago and $0.18 in the prior quarter.Cash, cash equivalents and short-term investments were $1.77 billion at the end of the quarter.Quarterly Financial Segment SummaryComputing and Graphics segment revenue was $1.67 billion, up 31 percent year-over-year and 22 percent quarter-over-quarter. Revenue was higher year-over-year driven by a significant increase in Ryzen processor sales partially offset by lower graphics revenue. Revenue was higher quarter-over-quarter driven by a significant increase in Ryzen processor sales and an increase in graphics revenue.Client processor average selling price (ASP) was lower year-over-year due to a higher mix of mobile processor sales. Client processor ASP was higher quarter-over-quarter driven by higher desktop and mobile processor ASPs.GPU ASP was lower year-over-year due to product cycle timing and higher quarter-over-quarter due to product mix.Operating income was $384 million compared to $179 million a year ago and $200 million in the prior quarter. The year-over-year and quarter-over-quarter increases were driven by higher Ryzen revenue.Enterprise, Embedded and Semi-Custom segment revenue was $1.13 billion, up 116 percent year-over-year and 101 percent quarter-over-quarter. Revenue was higher year-over-year and quarter-over-quarter due to higher semi-custom product sales and increased EPYC processor sales. Operating income was $141 million compared to $61 million a year ago and $33 million in the prior quarter. The year-over-year and quarter-over-quarter increases were primarily driven by higher revenue.All Other operating loss was $76 million compared to operating losses of $54 million a year ago and $60 million in the prior quarter.Recent PR HighlightsAMD introduced the AMD Ryzen 5000 Series desktop processors, extending AMD leadership across gaming, single-threaded, and multi-threaded performance as well as power efficiency. Powered by the new “Zen 3” core architecture, the new processors deliver a 19 percent generational increase in instructions per cycle (IPC), the largest since the introduction of “Zen” processors in 2017.AMD EPYC processor adoption continues to grow as data center customers harness our differentiated performance and features for cloud computing, high-performance computing (HPC), hyperconverged infrastructure (HCI), virtualization and more.AMD EPYC processors are now being used by the Azure Data Explorer data analytics platform to improve real-time analysis on large volumes of data streaming from applications, websites, IoT devices and more.Oracle announced plans to offer cloud instances based on next-generation AMD EPYC processors, codenamed “Milan.”Cloud service providers continued to announce the availability of new instances based on AMD EPYC processors, including AWS C5ad instances for compute intensive workloads, Google Cloud Confidential VMs featuring AMD Secure Encrypted Virtualization, and Microsoft Azure VMs which use AMD EPYC processors to power Office 365 applications.AMD announced growing ecosystem support for virtualization solutions based on VMware® and Nutanix™ software from Dell, HPE and Lenovo.VMware announced support for AMD Secure Encrypted Virtualization – Encrypted State technology in its latest version of vSphere®.Northern Data is leveraging AMD EPYC and AMD Radeon Instinct™ processors for one of the world's largest GPU-based distributed computing clusters for HPC applications at sites across Norway, Sweden and Canada.AMD expanded its position in the consumer and commercial client markets with new products and growing adoption of AMD Ryzen processors by leading OEMs.OEM partners continued to launch new AMD-powered notebooks, desktops and Chromebooks, including new HP and Lenovo notebooks and desktops for the commercial, consumer and gaming markets and the first “Zen”-based Chromebooks.AMD announced new AMD Ryzen 4000 Series Desktop Processors with Radeon Graphics and AMD Athlon™ 3000 Series Desktop Processors with Radeon Graphics for the consumer market, as well as the new AMD Ryzen PRO 4000 Series and AMD Athlon PRO 3000 Series Desktop Processors for the commercial market.AMD and Apple announced the availability of new AMD Radeon Pro 5000 series GPUs for the updated 27-inch iMac, bringing compute performance, energy efficiency and features to a wide variety of graphically intensive applications and workloads.AMD announced additional high-performance technology contributions to assist in the global fight against the COVID-19 pandemic, including high-performance computing systems or access to cloud-based clusters powered by 2nd Gen AMD EPYC and AMD Radeon Instinct processors for 21 institutions and research facilities around the world.AMD announced its annual corporate responsibility update, highlighting how AMD and its technologies are addressing sustainable technological and scientific advancement, environmental and supply chain responsibility, workplace inclusion and community support.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 fourth quarter of 2020, AMD expects revenue to be approximately $3.0 billion, plus or minus $100 million, an increase of approximately 41 percent year-over-year and 7 percent sequentially. The year-over-year increase is expected to be primarily driven by the ramp of new Ryzen, EPYC and semi-custom products and growing customer momentum. AMD expects non-GAAP gross margin to be approximately 45 percent in the fourth quarter of 2020.
AMD now expects 2020 revenue to grow by approximately 41 percent compared to 2019, up from prior guidance of 32 percent. Non-GAAP gross margin is expected to be approximately 45 percent, consistent with prior guidance.
AMD Teleconference
AMD will hold a conference call for the financial community at 8:00 a.m. ET (5:00 a.m. PT) today to discuss its third quarter 2020 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 50 years, AMD has driven innovation in high-performance computing, graphics and visualization technologies – the building blocks for gaming, immersive platforms and the data center. 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 Twitter pages.Cautionary StatementThis press release contains forward-looking statements concerning Advanced Micro Devices, Inc. (AMD) such as AMD’s ability to continue to deliver best-in-class growth and extend its leadership product portfolio; the features, functionality, performance, availability, timing and expected benefits of AMD products; and AMD’s expected fourth quarter of 2020 outlook including, revenue and non-GAAP gross margin and expected drivers, based on current expectations, global economic backdrop and customer demand signals, 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; the ability of third party manufacturers to manufacture AMD's products on a timely basis in sufficient quantities and using competitive technologies; expected manufacturing yields for AMD’s products; AMD's ability to introduce products on a timely basis with features and performance levels that provide value to its customers; global economic uncertainty; the loss of a significant customer; AMD's ability to generate revenue from its semi-custom SoC products; the impact of the COVID-19 pandemic on AMD’s business, financial condition and results of operations; political, legal, economic risks and natural disasters; the impact of government actions and regulations such as export administration regulations, tariffs and trade protection measures; potential security vulnerabilities; potential IT outages, data loss, data breaches and cyber-attacks; uncertainties involving the ordering and shipment of AMD’s products; quarterly and seasonal sales patterns; the restrictions imposed by agreements governing AMD’s notes and the secured credit facility; the competitive markets in which AMD’s products are sold; AMD's ability to generate sufficient revenue and operating cash flow or obtain external financing for research and development or other strategic investments; the potential dilutive effect if the 2.125% Convertible Senior Notes due 2026 are converted; market conditions of the industries in which AMD products are sold; 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 the design, manufacture and supply of motherboards, software and other computer platform components; AMD's reliance on Microsoft Corporation 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; future impairments of goodwill and technology license purchases; AMD’s ability to attract and retain qualified personnel; AMD's indebtedness; AMD's ability to generate sufficient cash to service its debt obligations or meet its working capital requirements; AMD's ability to repurchase its outstanding debt in the event of a change of control; the cyclical nature of the semiconductor industry; the impact of acquisitions, joint ventures and/or investments on AMD's business; the impact of modification or interruption of AMD’s internal business processes and information systems; the availability of essential equipment, materials or manufacturing processes; compatibility of AMD’s products with some or all industry-standard software and hardware; costs related to defective products; the efficiency of AMD's supply chain; AMD's ability to rely on third party supply-chain logistics functions; AMD’s stock price volatility; worldwide political conditions; unfavorable currency exchange rate fluctuations; AMD’s ability to effectively control the sales of its products on the gray market; AMD's ability to adequately protect its technology or other intellectual property; current and future claims and litigation; potential tax liabilities; and the impact of environmental laws, conflict minerals-related provisions and other laws or regulations. 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 June 27, 2020.AMD, the AMD Arrow logo, EPYC, Radeon, Ryzen, Athlon and combinations thereof, are trademarks of Advanced Micro Devices, Inc.
Other names are for informational purposes only, used to identify companies and products and may be trademarks of their owner.
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Media Contact:
Drew Prairie
AMD Communications
512-602-4425
drew.prairie@amd.comInvestor Contact:
Laura Graves
AMD Investor Relations
408-749-5467
laura.graves@amd.com
The Link Lonk
October 27, 2020 at 05:30PM
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AMD Reports Third Quarter 2020 Financial Results Nasdaq:AMD - GlobeNewswire
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