Advanced Micro Devices Inc · NASDAQ:AMD
Advanced Micro Devices — Q1 2020 Earnings Presentation
27 slides from Advanced Micro Devices's earnings presentation, Apr 28, 2020
Slide 1: First Quarter 2020 Financial Results
FIRST QUARTER 2020 FINANCIAL RESULTS APRIL 28, 2020
Slide 2: Cautionary Statement
CAUTIONARY STATEMENT This presentation contains forward-looking statements concerning Advanced Micro Devices, Inc. (AMD) such as the expected number of Ryzen-powered consumer and commercial notebooks from OEMs; expectations and deployment of the exascale-class supercomputer, El Capitan; the feature
Slide 3: Our Journey
OUR JOURNEY High-Performance Disruptive Solutions Strong and Best-in-Class Computing Combining CPUs Predictable Growth Leadership and GPUs Execution Franchise 3 FIRST QUARTER 2020 FINANCIAL RESULTS | APRIL 28, 2020
Slide 4: Our Technology Investments
OUR TECHNOLOGY INVESTMENTS INDUSTRY-LEADING IP ADVANCED TECHNOLOGY DATA CENTER LEADERSHIP PC/GAMING SOLUTIONS Delivering Multi-generational Leadership Process, Innovation in Cloud, Driving Leadership PC Leadership CPU and GPU Packaging and Interconnect Enterprise, and Accelerated Experiences and Gam
Slide 5: Our Best Product Portfolio Ever
OUR BEST PRODUCT PORTFOLIO EVER Leadership Desktop Processors Leadership Ultrathin and Unmatched High-end Desktop Price-performance Leadership Up to 64 “Zen 2” Cores with with up to 16 “Zen 2” Cores Gaming Notebook Processors with up to 64 “Zen 2” Cores with New RDNA Architecture up to 50% Lower TCO
Slide 6: Financial Summary Q1 2020
FINANCIAL SUMMARY Q1 2020¹ ▪ Revenue of $1.79 billion, up 40% y/y and down 16% q/q Quarterly Revenue ($B) ‒ Up y/y driven primarily by Computing and Graphics segment revenue ‒ Down q/q due to lower revenue in both segments +40% y/y ‒ Navigated pockets of supply chain disruption and demand shifts cau
Slide 7: Computing and Graphics Segment Q1 2020
COMPUTING AND GRAPHICS SEGMENT Q1 2020 ▪ Revenue of $1.44 billion ‒ Up 73% y/y primarily driven by strong Ryzen processor and RadeonTM product channel sales ‒ Down 13% q/q primarily due to lower graphics processor sales ▪ Average Selling Price (ASP) ‒ Client processor ASP up y/y driven by Ryzen proc
Slide 8: Enterprise, Embedded and Semi-Custom Segment Q1 2020
ENTERPRISE, EMBEDDED AND SEMI-CUSTOM SEGMENT Q1 2020 ▪ Revenue of $348 million ‒ Down 21% y/y and 25% q/q primarily due to lower semi-custom sales, partially offset by higher EPYC processor sales ▪ Operating loss of $26 million ‒ As compared to operating income of $68 million in Q1 2019, which inclu
Slide 9: Revenue Trend ($ in Millions)
REVENUE TREND ($ IN MILLIONS) $2,127 +40% y/y $1,801 $1,756 $1,786 $1,653 $1,531 $1,419 $1,272 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 STRONG Y/Y REVENUE GROWTH 9 FIRST QUARTER 2020 FINANCIAL RESULTS | APRIL 28, 2020
Slide 10: Gross Margin Trend (GAAP and Non-GAAP)
GROSS MARGIN TREND (AS A PERCENTAGE OF REVENUE, GAAP AND NON-GAAP)¹ +5pp y/y 41% 45% 46% 43% 40% 41% 41% 37% 38% 2 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 SOLID Y/Y GROSS MARGIN EXPANSION 1. See Appendices for GAAP to Non-GAAP reconciliation 2. Gross margin for both GAAP and Non-GAAP are the
Slide 11: Earnings Per Share Trend (GAAP)
EARNINGS PER SHARE TREND (GAAP) +$0.13 y/y $0.15 $0.14 $0.11 $0.11 $0.09 $0.04 $0.03 $0.01 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 SIGNIFICANT Y/Y GROWTH IN EARNINGS PER SHARE 11 FIRST QUARTER 2020 FINANCIAL RESULTS | APRIL 28, 2020
Slide 12: Earnings Per Share Trend (Non-GAAP)
EARNINGS PER SHARE TREND (NON-GAAP)¹ $0.32 +$0.12 y/y $0.18 $0.18 $0.14 $0.13 $0.08 $0.08 $0.06 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 SIGNIFICANT Y/Y GROWTH EARNINGS PER SHARE 12 FIRST QUARTER 2020 FINANCIAL RESULTS | APRIL 28, 2020 1. See Appendices for GAAP to Non-GAAP reconciliation
Slide 13: Q1 2020 Summary P&L – GAAP
Q1 2020 SUMMARY P&L – GAAP Q1 2020 Q1 2019 Y/Y Q4 2019 Q/Q Revenue $1,786M $1,272M Up 40% $2,127M Down 16% Gross Margin $818M $521M Up $297M $949M Down $131M Gross Margin % 46% 41% Up 5pp 45% Up 1pp Operating Expenses $641M $543M Up $98M $601M Up $40M Operating Expense/Revenue % 36% 43% Down 7pp 28%
Slide 14: Q1 2020 Summary P&L – Non-GAAP
Q1 2020 SUMMARY P&L – NON-GAAP¹ Q1 2020 Q1 2019 Y/Y Q4 2019 Q/Q Revenue $1,786M $1,272M Up 40% $2,127M Down 16% Gross Margin $820M $522M Up $298M $950M Down $130M Gross Margin % 46% 41% Up 5pp 45% Up 1pp Operating Expenses $584M $498M Up $86M $545M Up $39M Operating Expense/Revenue % 33% 39% Down 6p
Slide 15: Q1 2020 Segment Results
Q1 2020 SEGMENT RESULTS Q1 2020 Q1 2019 Y/Y Q4 2019 Q/Q Computing and Graphics Net Revenue $1,438M $831M Up 73% $1,662M Down 13% Operating Income $262M $16M Up $246M $360M Down $98M Enterprise, Embedded and Semi- Custom Net Revenue $348M $441M Down 21% $465M Down 25% Operating Income (Loss) $(26M) $
Slide 16: Q1 2020 Summary Balance Sheet Items
Q1 2020 SUMMARY BALANCE SHEET ITEMS Q1 2020 Q1 2019 Y/Y Q4 2019 Q/Q Cash, Cash Equivalents & Marketable $1,385M $1,194M Up $191M $1,503M Down $118M Securities Accounts Receivable, Net $1,691M $1,241M Up $450M $1,859M Down $168M Inventories, Net $1,056M $955M Up $101M $982M Up $74M Total Debt (princi
Slide 17: Total Cash Balance ($ in Millions)
TOTAL CASH BALANCE¹ ($ IN MILLIONS) $1,503 $1,385 $1,194 $1,209 $1,156 $1,128 $1,056 $983 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 STABLE NET CASH POSITION 17 FIRST QUARTER 2020 FINANCIAL RESULTS | APRIL 28, 2020 1. Cash, cash equivalents and marketable securities
Slide 18: Debt and Leverage Trend
DEBT AND LEVERAGE TREND (DEBT PRINCIPAL AMOUNT, TRAILING TWELVE MONTHS ADJUSTED EBITDA AND NET INCOME TREND, $ IN MILLIONS)¹·²·³ Debt Balance TTM Adjusted EBITDA Leverage Ratio $1,685 $1,588 $1,528 $1,363 $1,293 $1,236 $1,087 2.5x $1,062 2.2x 1.9x $803 1.8x 1.9x $709 $737 $745 $666 $672 1.5x $563 $5
Slide 19: AMD Response to COVID-19
AMD RESPONSE TO COVID-19 ▪ AMD is contributing over $2 million in monetary and medical PPE donations ▪ AMD joined forces with medical research to help fight the global pandemic: ‒ Launched a COVID-19 High Performance Computing Fund with an initial donation of $15 million of high-performance systems
Slide 20: Q2 2020 and FY 2020 Financial Outlook – Non-GAAP
Q2 2020 AND FY 2020 FINANCIAL OUTLOOK – NON-GAAP¹ Q2 2020 FY 2020 ~$1.85 Billion Growth of ~25% Revenue +/- $100 Million +/- 5 percentage points Gross Margin % ~44% ~45% Operating Expenses ~$600M ~29% Operating Expenses/Revenue % Interest Expense, Taxes and Other ~$20 Million -- Taxes -- ~3% of pre-
Slide 21: Q1 2020 Summary
Q1 2020 SUMMARY Quarterly Revenue Growth Driven by Strong Y/Y Significant Y/Y Increased 40% Y/Y Ryzen and EPYC Gross Margin Net Income and Processor Sales Expansion EPS Growth 21 FIRST QUARTER 2020 FINANCIAL RESULTS | APRIL 28, 2020
Slide 22: Building the Best
BUILDING THE BEST Leadership Execution Sustained Market Strong Roadmaps Excellence Share Gains Financial Returns 22 FIRST QUARTER 2020 FINANCIAL RESULTS | APRIL 28, 2020
Slide 23: Appendices: Reconciliation of GAAP to Non-GAAP Gross Margin
APPENDICES Reconciliation of GAAP to Non-GAAP Gross Margin (Millions) Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 GAAP gross margin $ 652 $ 661 $ 537 $ 521 $ 621 $ 777 $ 949 $ 818 GAAP gross margin % 37% 40% 38% 41% 41% 43% 45% 46% Impairment of technology licenses – – 45 – – – – – Stock-based c
Slide 24: Appendices: Reconciliation of GAAP Operating Income to Non-GAAP
APPENDICES Reconciliation of GAAP Operating Income to Non-GAAP Operating Income (Millions) Q1'20 Q1'19 Q4'19 GAAP operating income $ 177 $ 38 $ 348 Stock-based compensation 59 41 57 Loss contingency on legal matter – 5 – Non-GAAP operating income $ 236 $ 84 $ 405 Reconciliation of GAAP Net Income to
Slide 25: Appendices: Reconciliation of GAAP to Non-GAAP Net Income / EPS
APPENDICES Reconciliation of GAAP to Non-GAAP Net Income / Earnings Per Share (Millions, except per share data) Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 GAAP net income / earnings per share $ 116 $ 0.11 $ 102 $ 0.09 $ 38 $ 0.04 $ 16 $ 0.01 $ 35 $ 0.03 $ 120 $ 0.11 $ 170 $ 0.15 $ 162 $ 0.14 Lo
Slide 26: Appendices: Share Count Overview
APPENDICES Share Count Overview (1) Q4'19 Q1'20 Q2'20 2020 Shares (millions) Actual Actual Estimate Estimate Basic Shares 1,140 1,170 1,173 1,177 Dilutive impacts from: Employee Equity Grants (2) 17 23 22 20 Diluted Shares (without 2026 Convertible Notes) 1,157 1,193 1,195 1,197 2026 Convertible Not
Slide 27: Appendices: Total Debt (Net)
APPENDICES Total Debt (Net) (Millions) Q2’18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 6.75% Senior Notes due 2019 $ 153 $ 66 $ 66 $ – $ – $ – $ – $ – 7.50% Senior Notes due 2022 347 337 337 312 312 312 312 312 7.00% Senior Notes due 2024 310 310 250 176 176 96 – – 2.125% Convertible Senior Notes du
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