10-QPeriod: Q2 FY2017

ADVANCED MICRO DEVICES INC Quarterly Report for Q2 Ended Apr 1, 2017

Filed May 8, 2017For Securities:AMD

Summary

Advanced Micro Devices, Inc. (AMD) reported its first quarter 2017 results, showing a notable increase in net revenue of 18% year-over-year to $984 million. This growth was primarily driven by a 29% increase in the Computing and Graphics segment, bolstered by higher average selling prices, especially from the new Ryzen desktop processors. The company also demonstrated improved profitability with a reduced net loss of $73 million compared to $109 million in the prior year's quarter, and an operating loss of $29 million versus $68 million in Q1 2016. Gross margin also improved to 34% from 32% year-over-year, attributed to a richer product mix. Despite these positive trends, the company's cash position decreased to $943 million from $1.26 billion at the end of 2016 due to operating and investing activities.

Financial Highlights

50 data points
Beta

Revenue

$1.18B

32.1% Gross Margin

Net Income

-$33.00M

-2.8% Net Margin

EPS (Diluted)

$-0.04

Total Assets

$3.30B

Cash & Equivalents

$722.00M

Free Cash Flow

-$322.00M

Financial Statements
Beta
Revenue$1.18B
Cost of Revenue$800.00M
Gross Profit$378.00M
R&D Expenses$271.00M
SG&A Expenses$123.00M
Operating Income$11.00M
Interest Expense$32.00M
Net Income-$33.00M
EPS (Basic)$-0.04
EPS (Diluted)$-0.04
Shares Outstanding (Basic)939.00M
Shares Outstanding (Diluted)939.00M

Key Highlights

  • 1Net revenue increased 18% year-over-year to $984 million, driven by strong performance in the Computing and Graphics segment.
  • 2Gross margin improved to 34% from 32% year-over-year, benefiting from a richer product mix, including new Ryzen processors.
  • 3Net loss narrowed to $73 million ($0.08 per share) from $109 million ($0.14 per share) in the prior year's quarter.
  • 4Operating loss decreased to $29 million from $68 million year-over-year.
  • 5Cash, cash equivalents, and marketable securities decreased to $943 million from $1.26 billion at the end of 2016.
  • 6The company made progress on its debt management, with total debt decreasing slightly to $1.41 billion.
  • 7Introduced AMD Ryzen™ 7 desktop processors based on the new 'Zen' core microarchitecture, which saw strong initial customer demand and positively impacted gross margin.

Frequently Asked Questions

Revenue growth was primarily driven by the Computing and Graphics segment, which saw a 29% increase year-over-year. This was largely due to a 24% increase in average selling prices, particularly from the new AMD Ryzen™ desktop processors and desktop GPU products.

AMD showed improved profitability. The net loss decreased to $73 million from $109 million, and the operating loss narrowed to $29 million from $68 million. The gross margin also improved to 34% from 32%, mainly due to a better product mix.

As of the end of Q1 2017, AMD's cash, cash equivalents, and marketable securities decreased to $943 million from $1.26 billion at the end of 2016. Total debt saw a slight decrease to $1.41 billion.

The introduction of AMD Ryzen™ 7 desktop processors, based on the new 'Zen' core microarchitecture, has been positively received with strong initial customer demand. These sales were accretive to gross margin in the first quarter, indicating a positive impact on profitability and competitive positioning in the high-performance desktop market.