01—Abstract
Summary
Summary of the 10-K filed February 4, 2020. Cited figures are marked; the original filing is the authoritative source.
Advanced Micro Devices, Inc. (AMD) reported fiscal year 2019 results showing a 4% increase in net revenue to $6.73 billiona, driven primarily by a strong performance in its Computing and Graphics segment.
This growth was fueled by a 22% increase in average selling price, largely due to high demand for Ryzen processors, and a 4% rise in unit shipments. The company demonstrated significant financial improvement, with gross margin expanding to 43% from 38% in the prior year, and operating income increasing to $631 millionb from $451 million. Net income also saw a slight increase to $341 million.
AMD made substantial progress in strengthening its balance sheet, notably reducing its total debt principal from $1.5 billion to $0.6 billionc, while increasing its cash, cash equivalents, and marketable securities balance to $1.5 billion. The report highlights AMD's successful execution of its 7nm product roadmap, with the introduction of new Ryzen processors for desktops and notebooks, as well as the EPYC server processors.
The company also launched new Radeon graphics products for gaming and professional workstations, reinforcing its competitive position across key markets. Management expressed confidence in the company's ability to fund operations and capital expenditures over the next twelve months.
02—Key points
Key Highlights
- Net revenue increased by 4% to $6.73 billion in 2019, driven by strong Computing and Graphics segment performance.
- Gross margin improved significantly to 43% in 2019 from 38% in 2018, reflecting higher-margin product sales.
- Operating income grew to $631 million from $451 million in 2018.
- Net income for 2019 was $341 million, a slight increase from $337 million in 2018.
- Total debt principal was reduced from $1.5 billion to $0.6 billion, demonstrating improved financial health.
- Cash, cash equivalents, and marketable securities increased to $1.5 billion.
- Successful launch of 7nm product portfolio, including new Ryzen processors and EPYC server processors, as well as Radeon graphics cards.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2019, Advanced Micro Devices Inc kept $0.05.
- Revenue$6.73B100.0%
- Cost of revenue−$3.86B57.4%
- Gross profit$2.87B42.6%
- Operating costs−$2.24B33.2%
- Operating income$631.0M9.4%
- Interest, other & tax−$290.0M4.3%
- Net income$341.0M5.1%
Where FY2019 revenue went
$6.73B- Cost of revenue: $3.86B, 57% of revenue
- R&D: $1.55B, 23% of revenue
- Net income: $341.0M, 5.1% of revenue
- SG&A: $750.0M, 11% of revenue
- Interest, other & tax: $290.0M, 4.3% of revenue
Kept 5.1% as net incomeNet income $341.0M · 5.1%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2019filed February 4, 2020Financial Statements
FY2019 against FY2018
| Line item | FY2019FY2018 | Change |
|---|---|---|
| Revenue | $6.73B$6.47B | +4.0% |
| Cost of Revenue | $3.86B$4.03B | −4.1% |
| Gross Profit | $2.87B$2.45B | +17.2% |
| R&D Expenses | $1.55B$1.43B | +7.9% |
| SG&A Expenses | $750.00M$562.00M | +33.5% |
| Operating Income | $631.00M$451.00M | +39.9% |
| Interest Expense | $94.00M$121.00M | −22.3% |
| Net Income | $341.00M$337.00M | +1.2% |
| EPS (Basic) | $0.31$0.34 | −8.8% |
| EPS (Diluted) | $0.30$0.32 | −6.3% |
| Shares Outstanding (Basic) | 1.09B982.00M | +11.1% |
| Shares Outstanding (Diluted) | 1.12B1.06B | +5.3% |
05—Questions
Frequently Asked Questions
What were AMD's key financial performance indicators for fiscal year 2019?
In fiscal year 2019, AMD reported net revenue of $6.73 billion, a 4% increase year-over-year. Gross margin improved to 43% from 38% in 2018. Operating income rose to $631 million, and net income was $341 million. The company also significantly reduced its debt and increased its cash reserves.
Which product segments contributed most to AMD's revenue growth in 2019?
The Computing and Graphics segment was the primary driver of revenue growth in 2019, with net revenue increasing by 14% compared to 2018. This was mainly attributed to higher average selling prices for Ryzen processors and increased unit shipments.
How did AMD manage its debt and liquidity in 2019?
AMD made substantial progress in managing its debt, reducing the total debt principal from $1.5 billion at the end of 2018 to $0.6 billion by the end of 2019. Concurrently, the company increased its cash, cash equivalents, and marketable securities to $1.5 billion, indicating improved liquidity and financial stability.
What strategic product launches did AMD highlight in its 2019 report?
AMD highlighted the successful execution of its 7nm product roadmap, including the introduction of its 3rd Gen Ryzen desktop processors, Ryzen 3000 Series mobile processors, and 2nd Gen EPYC server processors. In graphics, the company launched new Radeon VII, RX 5700-series, RX 5500 series, and Radeon Pro W5700 products.
06—Continue