10-QPeriod: Q1 FY2021

ADVANCED MICRO DEVICES INC Quarterly Report for Q1 Ended Mar 27, 2021

Filed April 28, 2021For Securities:AMD

Summary

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 billion, 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 billion. 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.

Financial Highlights

49 data points
Beta

Revenue

$3.44B

46.1% Gross Margin

Net Income

$555.00M

16.1% Net Margin

EPS (Diluted)

$0.45

Total Assets

$10.05B

Cash & Equivalents

$1.76B

Free Cash Flow

$832.00M

Financial Statements
Beta
Revenue$3.44B
Cost of Revenue$1.86B
Gross Profit$1.59B
R&D Expenses$610.00M
SG&A Expenses$319.00M
Operating Income$662.00M
Interest Expense$9.00M
Net Income$555.00M
EPS (Basic)$0.46
EPS (Diluted)$0.45
Shares Outstanding (Basic)1.21B
Shares Outstanding (Diluted)1.23B

Key Highlights

  • 1Net revenue increased by an impressive 93% year-over-year to $3.4 billion.
  • 2Operating income more than tripled to $662 million, reflecting strong revenue growth outpacing expense increases.
  • 3Net income surged to $555 million, resulting in diluted EPS of $0.45, a significant increase from $0.14 in the prior year.
  • 4The Enterprise, Embedded and Semi-Custom segment experienced a remarkable 286% revenue growth, largely driven by semi-custom and EPYC server processor sales.
  • 5Cash, cash equivalents, and short-term investments grew to $3.1 billion, indicating strong liquidity.
  • 6Research and Development expenses increased by 38% to $610 million, highlighting continued investment in innovation.
  • 7The acquisition of Xilinx is progressing, with stockholder approvals obtained and closing anticipated by the end of calendar year 2021.

Frequently Asked Questions

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.

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.

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.

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.