10-QPeriod: Q2 FY2021

ADVANCED MICRO DEVICES INC Quarterly Report for Q2 Ended Jun 26, 2021

Filed July 28, 2021For Securities:AMD

Summary

Advanced Micro Devices, Inc. (AMD) reported robust financial results for the second quarter and first half of 2021, demonstrating significant year-over-year growth across key metrics. Total revenue surged by 99% to $3.85 billion for the quarter and 96% to $7.30 billion for the six-month period, driven by strong performance in both the Computing and Graphics segment and the Enterprise, Embedded and Semi-Custom segment. The company saw a notable improvement in gross margin to 48% for the quarter, up from 44% in the prior year, attributed to a richer sales mix including high-end processors. Net income saw a substantial increase, reaching $710 million ($0.58 diluted EPS) for the quarter and $1.27 billion ($1.03 diluted EPS) for the six months, a significant jump from the prior year. This strong financial performance is further bolstered by a substantial increase in cash, cash equivalents, and short-term investments, which grew to $3.8 billion. AMD also announced a new $4 billion stock repurchase program, signaling confidence in future performance and a commitment to returning value to shareholders.

Financial Highlights

50 data points
Beta

Revenue

$3.85B

47.5% Gross Margin

Net Income

$710.00M

18.4% Net Margin

EPS (Diluted)

$0.58

Total Assets

$10.69B

Cash & Equivalents

$2.62B

Free Cash Flow

$888.00M

Financial Statements
Beta
Revenue$3.85B
Cost of Revenue$2.02B
Gross Profit$1.83B
R&D Expenses$659.00M
SG&A Expenses$341.00M
Operating Income$831.00M
Interest Expense$10.00M
Net Income$710.00M
EPS (Basic)$0.58
EPS (Diluted)$0.58
Shares Outstanding (Basic)1.22B
Shares Outstanding (Diluted)1.23B

Key Highlights

  • 1Revenue for the second quarter of 2021 more than doubled, reaching $3.85 billion, a 99% increase year-over-year.
  • 2Net income for the quarter was $710 million, a substantial increase from $157 million in the prior year period, with diluted EPS of $0.58.
  • 3Gross margin improved to 48% in the second quarter, up from 44% in the same period last year, driven by a more favorable product mix.
  • 4The Enterprise, Embedded and Semi-Custom segment experienced exceptional growth, with revenue increasing by 183% year-over-year to $1.6 billion for the quarter.
  • 5Cash, cash equivalents, and short-term investments significantly increased to $3.8 billion as of June 26, 2021, up from $2.3 billion at the end of 2020.
  • 6AMD initiated a new $4 billion stock repurchase program, demonstrating financial strength and commitment to shareholder returns.
  • 7Operating income more than quadrupled to $831 million for the quarter, reflecting strong revenue growth and improved profitability.

Frequently Asked Questions

AMD's revenue growth was primarily driven by strong performance in both its segments. The Computing and Graphics segment saw increased sales of Ryzen processors and Radeon products, while the Enterprise, Embedded and Semi-Custom segment benefited from higher semi-custom revenue and strong EPYC server processor sales.

AMD's profitability significantly improved. Gross margin increased to 48% due to a richer mix of high-end product sales. Operating income more than quadrupled to $831 million, and net income surged to $710 million, reflecting the overall strong operational performance and increased sales.

The acquisition of Xilinx, Inc. was progressing, with stockholder approvals received and key regulatory clearances obtained from the UK and European Commission as of the filing date. The transaction was expected to close by the end of calendar year 2021, subject to remaining closing conditions.

AMD reported a strong increase in cash, cash equivalents, and short-term investments, reaching $3.8 billion, indicating a solid liquidity position. The company believes these resources, along with its revolving credit facility, are sufficient to fund operations and capital expenditures over the next 12 months and beyond. The company also initiated a substantial stock repurchase program.