10-QPeriod: Q2 FY2024

ADVANCED MICRO DEVICES INC Quarterly Report for Q2 Ended Jun 29, 2024

Filed July 31, 2024For Securities:AMD

Summary

Advanced Micro Devices, Inc. (AMD) reported strong performance in its second quarter ended June 29, 2024, with net revenue increasing by 9% year-over-year to $5.835 billion. This growth was primarily driven by a significant surge in the Data Center segment, which saw revenue more than double year-over-year, fueled by strong shipments of AMD Instinct GPUs and robust sales of 4th Gen AMD EPYC CPUs. The Client segment also showed substantial improvement with a 49% revenue increase, indicating a recovery in the PC market and strong demand for AMD Ryzen processors. Profitability also saw a significant uplift, with operating income turning positive at $269 million compared to a loss of $20 million in the prior year's quarter. Net income rose to $265 million from $27 million. The company's gross margin improved to 49% from 46%, largely attributed to the higher revenue from the Data Center segment. While the Gaming and Embedded segments experienced revenue declines, the overall performance highlights AMD's strategic focus on high-growth areas like AI and data center solutions, demonstrating positive momentum in its core markets.

Financial Highlights

55 data points
Beta

Revenue

$5.83B

49.1% Gross Margin

Net Income

$265.00M

4.5% Net Margin

EPS (Diluted)

$0.16

Total Assets

$67.89B

Cash & Equivalents

$4.11B

Free Cash Flow

$439.00M

Financial Statements
Beta
Revenue$5.83B
Cost of Revenue$2.97B
Gross Profit$2.86B
R&D Expenses$1.58B
SG&A Expenses$640.00M
Operating Expenses$2.60B
Operating Income$269.00M
Interest Expense$25.00M
Net Income$265.00M
EPS (Basic)$0.16
EPS (Diluted)$0.16
Shares Outstanding (Basic)1.62B
Shares Outstanding (Diluted)1.64B

Key Highlights

  • 1Net revenue for Q2 2024 increased 9% year-over-year to $5.835 billion.
  • 2Data Center segment revenue more than doubled, increasing 115% to $2.834 billion, driven by Instinct GPU shipments and EPYC CPU sales.
  • 3Client segment revenue grew 49% to $1.492 billion, signaling a recovery in the PC market.
  • 4Operating income turned positive at $269 million, a significant improvement from a $20 million loss in Q2 2023.
  • 5Gross margin expanded to 49% from 46% in the prior year, primarily due to strong Data Center performance.
  • 6Research and Development expenses increased by 10% to support the company's AI strategy.
  • 7The company generated $1.114 billion in net cash from operating activities for the first six months of 2024.

Frequently Asked Questions

The primary driver for the 9% year-over-year revenue increase to $5.835 billion was the exceptional performance of the Data Center segment, which grew 115%. This growth was fueled by strong demand for AMD's Instinct GPUs and 4th Gen EPYC CPUs, indicating robust adoption in the AI and server markets. The Client segment also contributed positively with a 49% revenue increase, suggesting a recovery in the PC market.

AMD demonstrated a significant improvement in profitability. Operating income swung from a loss of $20 million in Q2 2023 to a positive $269 million in Q2 2024. Net income also rose substantially from $27 million to $265 million. This was supported by an improved gross margin of 49% and higher revenue, despite increased R&D and marketing expenses.

The Data Center segment is showing very strong growth, more than doubling its revenue. The Client segment is also performing well, indicating market recovery. However, the Gaming and Embedded segments experienced revenue declines, primarily due to factors like lower semi-custom revenue and customers normalizing inventory levels, respectively.

AMD maintains a solid liquidity position with $5.3 billion in cash, cash equivalents, and short-term investments as of June 29, 2024. The company generated $1.114 billion in net cash from operating activities for the first six months of 2024 and has access to a $3.0 billion revolving credit facility. The repayment of a $750 million debt in June 2024 and continued stock repurchases demonstrate active capital management.