01—Abstract
Summary
Summary of the 10-Q filed April 29, 2020. Cited figures are marked; the original filing is the authoritative source.
Advanced Micro Devices, Inc. (AMD) reported strong financial performance for the first quarter ended March 28, 2020, with a significant 40% increase in net revenue to $1.786 billiona compared to the prior year.
This growth was primarily driven by a substantial 73%b surge in the Computing and Graphics segment, fueled by higher sales of Ryzen processors and Radeon products. The company also saw an improvement in gross margin to 46%, up from 41% in the prior year, attributed to a more favorable product mix. Despite the robust revenue growth, the Enterprise, Embedded and Semi-Custom segment experienced a 21% decline in revenue, largely due to lower semi-custom revenue, although EPYC server processor revenue saw an increase.
The company's net income dramatically improved to $162 millionc, a substantial jump from $16 million in the prior year period. AMD ended the quarter with a solid cash position of $1.33 billion. While the company noted potential disruptions from COVID-19, including supply chain impacts and payment delays, these had limited financial disruption in Q1 2020.
02—Key points
Key Highlights
- Net revenue increased by 40% year-over-year to $1.786 billion.
- Gross margin improved to 46% from 41% in the prior year period, driven by a favorable product mix.
- Net income surged to $162 million, a significant increase from $16 million in the same period last year.
- The Computing and Graphics segment revenue grew by 73%, largely due to strong Ryzen processor and Radeon product sales.
- Enterprise, Embedded and Semi-Custom segment revenue decreased by 21%, primarily due to lower semi-custom revenue.
- Cash, cash equivalents, and marketable securities stood at $1.33 billion as of March 28, 2020.
- Despite COVID-19 concerns, the company experienced limited financial disruption in Q1 2020.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2020, Advanced Micro Devices Inc kept $0.09.
- Revenue$1.79B100.0%
- Cost of revenue−$968.0M54.2%
- Gross profit$818.0M45.8%
- Operating costs−$641.0M35.9%
- Operating income$177.0M9.9%
- Interest, other & tax−$15.0M0.8%
- Net income$162.0M9.1%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2020filed April 29, 2020Financial Statements
Q1 FY2020 against Q1 FY2019
| Line item | Q1 FY2020Q1 FY2019 | Change |
|---|---|---|
| Revenue | $1.79B$1.27B | +40.4% |
| Cost of Revenue | $968.00M$751.00M | +28.9% |
| Gross Profit | $818.00M$521.00M | +57.0% |
| R&D Expenses | $442.00M$373.00M | +18.5% |
| SG&A Expenses | $199.00M$170.00M | +17.1% |
| Operating Income | $177.00M$38.00M | +365.8% |
| Interest Expense | $13.00M$27.00M | −51.9% |
| Net Income | $162.00M$16.00M | +912.5% |
| EPS (Basic) | $0.14$0.01 | +1300.0% |
| EPS (Diluted) | $0.14$0.01 | +1300.0% |
| Shares Outstanding (Basic) | 1.17B1.04B | +12.1% |
| Shares Outstanding (Diluted) | 1.22B1.09B | +11.9% |
05—Questions
Frequently Asked Questions
What was the primary driver of AMD's revenue growth in Q1 2020?
The primary driver was a 73% increase in the Computing and Graphics segment, fueled by higher sales of Ryzen processors and Radeon products. This strong performance in consumer-facing products offset a decline in the Enterprise, Embedded and Semi-Custom segment.
How did AMD's profitability change compared to the prior year?
Profitability improved significantly. Net income increased from $16 million in the prior year period to $162 million in Q1 2020. This was supported by a 40% increase in net revenue and an improved gross margin of 46%.
What is AMD's current financial position in terms of cash and debt?
As of March 28, 2020, AMD had $1.33 billion in cash, cash equivalents, and marketable securities. The aggregate principal amount of outstanding debt obligations was $563 million, remaining consistent with the prior year-end.
What impact has COVID-19 had on AMD's operations and financials in Q1 2020?
AMD reported limited financial disruption from COVID-19 in Q1 2020. However, the company did experience some supply chain disruptions and delays in customer payments. AMD expects COVID-19 to continue impacting its business operations and practices.
06—Continue