01—Abstract
Summary
Summary of the 10-Q filed July 28, 2021. Cited figures are marked; the original filing is the authoritative source.
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 billiona 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 billionb. AMD also announced a new $4 billion stock repurchase program, signaling confidence in future performance and a commitment to returning value to shareholders.
02—Key points
Key Highlights
- Revenue for the second quarter of 2021 more than doubled, reaching $3.85 billion, a 99% increase year-over-year.
- Net income for the quarter was $710 million, a substantial increase from $157 million in the prior year period, with diluted EPS of $0.58.
- Gross margin improved to 48% in the second quarter, up from 44% in the same period last year, driven by a more favorable product mix.
- The Enterprise, Embedded and Semi-Custom segment experienced exceptional growth, with revenue increasing by 183% year-over-year to $1.6 billion for the quarter.
- Cash, 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.
- AMD initiated a new $4 billion stock repurchase program, demonstrating financial strength and commitment to shareholder returns.
- Operating income more than quadrupled to $831 million for the quarter, reflecting strong revenue growth and improved profitability.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2021, Advanced Micro Devices Inc kept $0.18.
- Revenue$3.85B100.0%
- Cost of revenue−$2.02B52.5%
- Gross profit$1.83B47.5%
- Operating costs−$999.0M25.9%
- Operating income$831.0M21.6%
- Interest, other & tax−$121.0M3.1%
- Net income$710.0M18.4%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2021filed July 28, 2021Financial Statements
Q2 FY2021 against Q2 FY2020
| Line item | Q2 FY2021Q2 FY2020 | Change |
|---|---|---|
| Revenue | $3.85B$1.93B | +99.3% |
| Cost of Revenue | $2.02B$1.08B | +86.3% |
| Gross Profit | $1.83B$848.00M | +115.8% |
| R&D Expenses | $659.00M$460.00M | +43.3% |
| SG&A Expenses | $341.00M$215.00M | +58.6% |
| Operating Income | $831.00M$173.00M | +380.3% |
| Interest Expense | $10.00M$14.00M | −28.6% |
| Net Income | $710.00M$157.00M | +352.2% |
| EPS (Basic) | $0.58$0.13 | +346.2% |
| EPS (Diluted) | $0.58$0.13 | +346.2% |
| Shares Outstanding (Basic) | 1.22B1.17B | +3.6% |
| Shares Outstanding (Diluted) | 1.23B1.23B | +0.4% |
05—Questions
Frequently Asked Questions
What were the main drivers of AMD's revenue growth in this quarter?
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.
How did AMD's profitability change compared to the previous year?
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.
What is the status of the Xilinx acquisition?
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.
What is AMD's financial outlook and liquidity position?
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.
06—Continue