01—Abstract
Summary
Summary of the 10-Q filed April 28, 2021. Cited figures are marked; the original filing is the authoritative source.
Advanced Micro Devices (AMD) reported a strong first quarter of 2021, demonstrating significant year-over-year growth across key financial metrics.
Net revenue surged by 93% to $3.4 billiona, driven by robust performance in both the Computing and Graphics segment (up 46%) and exceptional growth in the Enterprise, Embedded and Semi-Custom segment (up 286%). This revenue expansion, fueled by strong sales of Ryzen processors, Radeon products, and EPYC server processors, translated into a substantial increase in profitability. Operating income more than tripled to $662 million, and net income reached $555 million, up from $162 million in the prior year period, leading to a significant jump in diluted earnings per share to $0.45 from $0.14.
The company's balance sheet remains solid, with cash, cash equivalents, and short-term investments increasing to $3.1 billionb. AMD continues to invest in product development, evident in the 38% increase in R&D expenses, while also incurring acquisition-related costs for the pending Xilinx acquisition, which is progressing as expected with stockholder approvals secured. Despite a challenging global economic environment and ongoing supply chain considerations, AMD appears well-positioned for continued growth, bolstered by its expanding product portfolio and strategic acquisitions.
02—Key points
Key Highlights
- Net revenue increased by an impressive 93% year-over-year to $3.4 billion.
- Operating income more than tripled to $662 million, reflecting strong revenue growth outpacing expense increases.
- Net income surged to $555 million, resulting in diluted EPS of $0.45, a significant increase from $0.14 in the prior year.
- The Enterprise, Embedded and Semi-Custom segment experienced a remarkable 286% revenue growth, largely driven by semi-custom and EPYC server processor sales.
- Cash, cash equivalents, and short-term investments grew to $3.1 billion, indicating strong liquidity.
- Research and Development expenses increased by 38% to $610 million, highlighting continued investment in innovation.
- The acquisition of Xilinx is progressing, with stockholder approvals obtained and closing anticipated by the end of calendar year 2021.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2021, Advanced Micro Devices Inc kept $0.16.
- Revenue$3.44B100.0%
- Cost of revenue−$1.86B53.9%
- Gross profit$1.59B46.1%
- Operating costs−$925.0M26.9%
- Operating income$662.0M19.2%
- Interest, other & tax−$107.0M3.1%
- Net income$555.0M16.1%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2021filed April 28, 2021Financial Statements
Q1 FY2021 against Q1 FY2020
| Line item | Q1 FY2021Q1 FY2020 | Change |
|---|---|---|
| Revenue | $3.44B$1.79B | +92.9% |
| Cost of Revenue | $1.86B$968.00M | +91.9% |
| Gross Profit | $1.59B$818.00M | +94.0% |
| R&D Expenses | $610.00M$442.00M | +38.0% |
| SG&A Expenses | $319.00M$199.00M | +60.3% |
| Operating Income | $662.00M$177.00M | +274.0% |
| Interest Expense | $9.00M$13.00M | −30.8% |
| Net Income | $555.00M$162.00M | +242.6% |
| EPS (Basic) | $0.46$0.14 | +228.6% |
| EPS (Diluted) | $0.45$0.14 | +221.4% |
| Shares Outstanding (Basic) | 1.21B1.17B | +3.7% |
| Shares Outstanding (Diluted) | 1.23B1.22B | +0.6% |
05—Questions
Frequently Asked Questions
What were the main drivers of AMD's significant revenue growth in Q1 2021?
AMD's revenue growth was driven by a 46% increase in Computing and Graphics net revenue, primarily due to higher sales of Ryzen processors and Radeon products, and a substantial 286% increase in Enterprise, Embedded and Semi-Custom net revenue, driven by higher semi-custom revenue and EPYC server processor sales.
How did AMD's profitability change compared to the previous year?
Profitability saw a significant improvement. Operating income increased from $177 million to $662 million, and net income rose from $162 million to $555 million. This led to a substantial increase in diluted earnings per share from $0.14 to $0.45.
What is the status of the Xilinx acquisition, and what is its expected impact?
The acquisition of Xilinx is progressing, with both AMD and Xilinx stockholders having approved their respective proposals. The closing is subject to customary conditions, including regulatory approval, and is currently expected by the end of calendar year 2021. The company expects the merger to result in operational synergies and cost efficiencies, driving product innovations.
How is AMD managing its liquidity and financial resources?
AMD reported strong liquidity, with cash, cash equivalents, and short-term investments totaling $3.1 billion as of March 27, 2021. The company believes these resources, along with its revolving credit facility, are sufficient to fund operations and capital expenditures. Net cash provided by operating activities was $898 million, demonstrating healthy cash generation.
06—Continue