AMD Reports First Quarter 2021 Financial Results

— Revenue grew 93 percent while net income and EPS tripled year-over-year —

SANTA CLARA, Calif., April 27, 2021 (GLOBE NEWSWIRE) -- AMD (NASDAQ:AMD) today announced revenue for the first quarter of 2021 of $3.45 billion, operating income of $662 million, net income of $555 million and diluted earnings per share of $0.45. On a non-GAAP* basis, operating income was $762 million, net income was $642 million and diluted earnings per share was $0.52.

GAAP Quarterly Financial Results

Non-GAAP* Quarterly Financial Results

“Our business continued to accelerate in the first quarter driven by the best product portfolio in our history, strong execution and robust market demand,” said Dr. Lisa Su, AMD president and CEO. “We had outstanding year-over-year revenue growth across all of our businesses and data center revenue more than doubled. Our increased full-year guidance highlights the strong growth we expect across our business based on increasing adoption of our high-performance computing products and expanding customer relationships.”

Q1 2021 Results

• Revenue was $3.45 billion, up 93 percent year-over-year and 6 percent quarter-over-quarter driven by higher revenue in both the Computing and Graphics and Enterprise, Embedded and Semi-custom segments.
• Gross margin was 46 percent, flat year-over-year and up 1 percentage point quarter-over-quarter. The quarter-over-quarter increase was driven by a greater mix of Ryzen™, Radeon™ and EPYC™ processor sales.
• Operating income was $662 million compared to operating income of $177 million a year ago and $570 million in the prior quarter. Non-GAAP operating income was $762 million compared to operating income of $236 million a year ago and $663 million in the prior quarter. Operating income improvements were primarily driven by higher revenue.
• Net income was $555 million compared to net income of $162 million a year ago and $1.78 billion in the prior quarter, which included an income tax benefit of $1.30 billion associated with a valuation allowance release. Non-GAAP net income was $642 million compared to net income of $222 million a year ago and $636 million in the prior quarter.
• Diluted earnings per share was $0.45 compared to diluted earnings per share of $0.14 a year ago and $1.45 in the prior quarter, which included an income tax benefit that contributed $1.06 to earnings per share. Non-GAAP diluted earnings per share was $0.52 based on a 15 percent effective tax rate compared to diluted earnings per share of $0.18 a year ago and $0.52 in the prior quarter. Prior periods had a 3 percent effective tax rate for non-GAAP results.
• Cash, cash equivalents and short-term investments were $3.12 billion at the end of the quarter.

Quarterly Financial Segment Summary

• Computing and Graphics segment revenue was $2.10 billion, up 46 percent year-over-year and 7 percent quarter-over-quarter primarily driven by Ryzen processor and Radeon graphics product sales growth.
  • Client processor average selling price (ASP) grew year-over-year and quarter-over-quarter driven by a richer mix of Ryzen desktop and notebook processor sales.
  • GPU ASP was higher year-over-year and quarter-over-quarter driven by high-end Radeon graphics products.
  • Operating income was $485 million compared to $262 million a year ago and $420 million in the prior quarter. The year-over-year and quarter-over-quarter increases were primarily driven by higher revenue.
• Enterprise, Embedded and Semi-Custom segment revenue was $1.35 billion, up 286 percent year-over-year and 5 percent quarter-over-quarter. The year-over-year increase was driven by higher semi-custom product sales and EPYC processor revenue. The quarter-over-quarter increase was driven by higher EPYC processor sales partially offset by lower semi-custom product sales.
  • Operating income was $277 million compared to an operating loss of $26 million a year ago and operating income of $243 million in the prior quarter. The year-over-year and quarter-over-quarter increases were primarily driven by higher revenue.
• All Other operating loss was $100 million compared to operating losses of $59 million a year ago and $93 million in the prior quarter.
  

Recent PR Highlights

• AMD announced the AMD EPYC 7003 series processors including the world’s highest performance server processor, the AMD EPYC 7763, extending AMD per-socket and per-core performance leadership. The processors provide up to two times better performance in high-performance computing (HPC), cloud and enterprise workloads compared to the competition, all with leadership security features. A broad set of partners announced offerings based on the new EPYC 7003 series processors.
  • Leading cloud providers announced new and upcoming instances and solutions powered by EPYC 7003 series processors, including Microsoft Azure HBv3 VMs and confidential computing VMs; Oracle Cloud infrastructure; Tencent Cloud instances; Amazon Web Services; and Google Cloud.
  • Multiple server providers launched new platforms powered by EPYC 7003 series processors and more than 100 new platforms are expected to launch in 2021, including Cisco UCS® rack server models; Dell Technologies PowerEdge servers; HPE ProLiant servers, HPE Apollo systems; HPE Cray EX supercomputers; Lenovo ThinkSystem servers and ThinkAgile HCI solutions; and Supermicro systems.
• AMD EPYC CPUs and AMD Instinct™ GPU accelerators are enabling powerful new solutions.
  • HPE and the KTH Royal Institute of Technology in Sweden announced a new pre-exascale supercomputer that will use next generation AMD EPYC processors and AMD Instinct GPUs.
  • AMD EPYC CPUs and AMD Instinct GPUs are powering expanded cloud-based HPC solutions, including Siemens NX and PTC Creo, both on Microsoft Azure NVv4 instances.
• AMD customers are on track to increase the number of notebooks based on the AMD Ryzen 5000 Series Mobile Processors and AMD Ryzen PRO 5000 Series Mobile Processors by 50 percent compared to the prior generation, as leading OEMs announced new systems for businesses, gamers, creators and consumers.
  • Acer introduced the new Nitro 5 and Aspire family of notebooks as well as the Chromebook Spin 514, powered by the recently announced Ryzen 3000 C-Series processors, the first Ryzen processors designed for the Chrome OS.
  • Asus unveiled a lineup of AMD-powered gaming notebooks, as well as updated AMD-powered notebooks for consumers, including new ZenBook, Chromebook Flip and VivoBook systems.
  • HP’s latest portfolio of EliteBook and ProBook business notebooks feature both Ryzen Mobile and Ryzen PRO Mobile 5000 Series Processors.
  • Lenovo introduced twelve new Ryzen 5000 and Ryzen 5000 PRO processor based notebooks, including ThinkBook models for commercial users, Legion and IdeaPad gaming and Yoga notebooks.
• AMD announced the Radeon RX 6700 XT GPU, delivering exceptional 1440p PC gaming experiences. Built on the AMD RDNA 2 gaming architecture and leading edge 7nm process technology, it is designed to deliver the optimal combination of performance and power efficiency.

Current Outlook
AMD’s outlook statements are based on current expectations. The following statements are forward-looking and actual results could differ materially depending on market conditions and the factors set forth under “Cautionary Statement” below.

For the second quarter of 2021, AMD expects revenue to be approximately $3.6 billion, plus or minus $100 million, an increase of approximately 86 percent year-over-year and 4 percent quarter-over-quarter. The year-over-year increase is expected to be driven by growth in all businesses. The quarter-over-quarter increase is expected to be primarily driven by growth in data center and gaming. AMD expects non-GAAP gross margin to be approximately 47 percent in the second quarter of 2021.

For the full year 2021, AMD now expects revenue growth of approximately 50 percent over 2020 driven by growth in all businesses, up from prior guidance of approximately 37 percent annual growth.

AMD Teleconference
AMD will hold a conference call for the financial community at 2:00 p.m. PT (5:00 p.m. ET) today to discuss its first quarter 2021 financial results. AMD will provide a real-time audio broadcast of the teleconference on the Investor Relations page of its website at www.amd.com. The webcast will be available for 12 months after the conference call.

About AMD
For more than 50 years, AMD has driven innovation in high-performance computing, graphics and visualization technologies – the building blocks for gaming, immersive platforms and the data center. Hundreds of millions of consumers, leading Fortune 500 businesses and cutting-edge scientific research facilities around the world rely on AMD technology daily to improve how they live, work and play. AMD employees around the world are focused on building great products that push the boundaries of what is possible. For more information about how AMD is enabling today and inspiring tomorrow, visit the AMD (NASDAQ: AMD) website, blog, Facebook and Twitter pages.

Cautionary Statement

This press release contains forward-looking statements concerning Advanced Micro Devices, Inc. (AMD) such as AMD’s expectation for strong growth across its business; AMD’s growth opportunities and customer relationships; the features, functionality, performance, availability, timing and expected benefits of AMD products; and AMD’s expected second quarter 2021 and fiscal 2021 financial outlook, including revenue and non-GAAP gross margin and expected drivers based on current expectations, which are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are commonly identified by words such as "would," "may," "expects," "believes," "plans," "intends," "projects" and other terms with similar meaning. Investors are cautioned that the forward-looking statements in this presentation are based on current beliefs, assumptions and expectations, speak only as of the date of this release and involve risks and uncertainties that could cause actual results to differ materially from current expectations. Such statements are subject to certain known and unknown risks and uncertainties, many of which are difficult to predict and generally beyond AMD's control, that could cause actual results and other future events to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. Material factors that could cause actual results to differ materially from current expectations include, without limitation, the following: Intel Corporation’s dominance of the microprocessor market and its aggressive business practices; global economic uncertainty; the loss of a significant customer; the impact of the COVID-19 pandemic on AMD’s business, financial condition and results of operations; the competitive markets in which AMD’s products are sold; quarterly and seasonal sales patterns; market conditions of the industries in which AMD products are sold; the cyclical nature of the semiconductor industry; AMD's ability to adequately protect its technology or other intellectual property; unfavorable currency exchange rate fluctuations; the ability of third party manufacturers to manufacture AMD's products on a timely basis in sufficient quantities and using competitive technologies; expected manufacturing yields for AMD’s products; the availability of essential equipment, materials, substrates, or manufacturing processes; AMD's ability to introduce products on a timely basis with features and performance levels that provide value to its customers; AMD's ability to generate revenue from its semi-custom SoC products; potential security vulnerabilities; potential IT outages, data loss, data breaches and cyber-attacks; uncertainties involving the ordering and shipment of AMD’s products; AMD’s reliance on third-party intellectual property to design and introduce new products in a timely manner; AMD's reliance on third-party companies for the design, manufacture and supply of motherboards, software and other computer platform components; AMD's reliance on Microsoft Corporation and other software vendors' support to design and develop software to run on AMD’s products; AMD’s reliance on third-party distributors and add-in-board partners; the impact of modification or interruption of AMD’s internal business processes and information systems; compatibility of AMD’s products with some or all industry-standard software and hardware; costs related to defective products; the efficiency of AMD's supply chain; AMD's ability to rely on third party supply-chain logistics functions; AMD’s ability to effectively control the sales of its products on the gray market; the impact of government actions and regulations such as export administration regulations, tariffs and trade protection measures; AMD’s ability to realize its deferred tax assets; potential tax liabilities; current and future claims and litigation; the impact of environmental laws, conflict minerals-related provisions and other laws or regulations; the impact of acquisitions, joint ventures and/or investments on AMD's business, including the announced acquisition of Xilinx, and the failure to integrate acquired businesses; AMD’s ability to complete the Xilinx merger; the impact of the announcement and pendency of the Xilinx merger on AMD’s business; the impact of any impairment of the combined company’s assets on the combined company’s financial position and results of operation; the restrictions imposed by agreements governing AMD’s notes and the revolving credit facility; the potential dilutive effect if the 2.125% Convertible Senior Notes due 2026 are converted; AMD's indebtedness; AMD's ability to generate sufficient cash to service its debt obligations or meet its working capital requirements; AMD's ability to repurchase its outstanding debt in the event of a change of control; AMD's ability to generate sufficient revenue and operating cash flow or obtain external financing for research and development or other strategic investments; political, legal, economic risks and natural disasters; future impairments of goodwill and technology license purchases; AMD’s ability to attract and retain qualified personnel; AMD’s stock price volatility; and worldwide political conditions. Investors are urged to review in detail the risks and uncertainties in AMD’s Securities and Exchange Commission filings, including but not limited to AMD’s most recent reports on Forms 10-K and 10-Q.

(*)    In this earnings press release, in addition to GAAP financial results, AMD has provided non-GAAP financial measures including non-GAAP gross profit, non-GAAP operating expenses, non-GAAP operating income, non-GAAP net income and non-GAAP earnings per share. AMD uses a normalized tax rate in its computation of the non-GAAP income tax provision to provide better consistency across the reporting periods. For fiscal 2021, AMD uses a projected non-GAAP tax rate of 15%, which excludes the tax impact of pre-tax non-GAAP adjustments, reflecting currently available information. AMD also provided adjusted EBITDA and free cash flow as supplemental non-GAAP measures of its performance. These items are defined in the footnotes to the selected corporate data tables provided at the end of this earnings press release. AMD is providing these financial measures because it believes this non-GAAP presentation makes it easier for investors to compare its operating results for current and historical periods and also because AMD believes it assists investors in comparing AMD’s performance across reporting periods on a consistent basis by excluding items that it does not believe are indicative of its core operating performance and for the other reasons described in the footnotes to the selected data tables. The non-GAAP financial measures disclosed in this earnings press release should be viewed in addition to and not as a substitute for or superior to AMD’s reported results prepared in accordance with GAAP and should be read only in conjunction with AMD’s Consolidated Financial Statements prepared in accordance with GAAP. These non-GAAP financial measures referenced are reconciled to their most directly comparable GAAP financial measures in the data tables at the end of this earnings press release. This earnings press release also contains forward-looking non-GAAP gross margin concerning AMD’s financial outlook, which is based on current expectations as of April 27, 2021 and assumptions and beliefs that involve numerous risks and uncertainties. AMD undertakes no intent or obligation to publicly update or revise its outlook statements as a result of new information, future events or otherwise, except as may be required by law.

AMD, the AMD Arrow logo, EPYC, Radeon, Ryzen, Instinct, Threadripper and combinations thereof, are trademarks of Advanced Micro Devices, Inc. Other names are for informational purposes only and used to identify companies and products and may be trademarks of their respective owner.