Advanced Micro Devices Inc · NASDAQ:AMD
Advanced Micro Devices — Q2 2020 Earnings Presentation
26 slides from Advanced Micro Devices's earnings presentation, Jul 28, 2020
Slide 1: Second Quarter 2020 Financial Results
SECOND QUARTER 2020 FINANCIAL RESULTS JULY 28, 2020
Slide 2: Cautionary Statement
CAUTIONARY STATEMENT This presentation contains forward-looking statements concerning Advanced Micro Devices, Inc. (AMD) such as the features, functionality, performance, availability, timing and expected benefits of AMD products; AMD’s financial outlook for the third quarter of 2020 and fiscal 2020
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 SECOND QUARTER 2020 FINANCIAL RESULTS | JULY 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 Performance & Power Efficiency 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 T
Slide 6: Financial Summary Q2 2020
FINANCIAL SUMMARY Q2 2020¹ . Revenue of $1.93 billion, up 26% y/y and up 8% q/q Quarterly Revenue ($B) ‒ Up y/y primarily driven by higher Computing and Graphics segment revenue ‒ Up q/q primarily driven by higher Enterprise, Embedded and Semi-Custom segment revenue +26% y/y . Gross margin of 44% $1
Slide 7: Computing and Graphics Segment Q2 2020
COMPUTING AND GRAPHICS SEGMENT Q2 2020 . Revenue of $1.37 billion ‒ Up 45% y/y driven by strong Ryzen processor sales ‒ Down 5% q/q due to lower graphics processor sales ‒ Highest client processor revenue in more than 12 years; record quarterly notebook processor unit shipments and revenue . Average
Slide 8: Enterprise, Embedded and Semi-Custom Segment Q2 2020
ENTERPRISE, EMBEDDED AND SEMI-CUSTOM SEGMENT Q2 2020 . Revenue of $565 million ‒ Down 4% y/y due to lower semi-custom product sales largely offset by record server processor sales ‒ Up 62% q/q driven by increased server processor and semi-custom product sales . Operating income of $33 million ‒ Down
Slide 9: Revenue Trend ($ in Millions)
REVENUE TREND ($ IN MILLIONS) $2,127 +26% y/y $1,932 $1,801 $1,786 $1,653 $1,531 $1,419 $1,272 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 REVENUE GREW 26 PERCENT Y/Y 9 SECOND QUARTER 2020 FINANCIAL RESULTS | JULY 28, 2020
Slide 10: Gross Margin Trend (GAAP and Non-GAAP)
GROSS MARGIN TREND (GAAP AND NON-GAAP)¹ +3pp y/y 41% 45% 46% 43% 44% 40% 41% 41% 38% 2 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 GROSS MARGIN EXPANDED 3 PERCENTAGE POINTS Y/Y 1. See Appendices for GAAP to Non-GAAP reconciliation 2. Gross margin for both GAAP and Non-GAAP are the same for all p
Slide 11: Earnings Per Share Trend (GAAP)
EARNINGS PER SHARE TREND (GAAP) $0.15 +$0.10 y/y $0.14 $0.13 $0.11 $0.09 $0.04 $0.03 $0.01 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 STRONG EARNINGS PER SHARE GROWTH Y/Y 11 SECOND QUARTER 2020 FINANCIAL RESULTS | JULY 28, 2020
Slide 12: Earnings Per Share Trend (Non-GAAP)
EARNINGS PER SHARE TREND (NON-GAAP)¹ $0.32 +$0.10 y/y $0.18 $0.18 $0.18 $0.13 $0.08 $0.08 $0.06 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 STRONG EARNINGS PER SHARE GROWTH Y/Y 12 SECOND QUARTER 2020 FINANCIAL RESULTS | JULY 28, 2020 1. See Appendices for GAAP to Non-GAAP reconciliation
Slide 13: Q2 2020 Summary P&L – GAAP
Q2 2020 SUMMARY P&L – GAAP Q2 2020 Q2 2019 Y/Y Q1 2020 Q/Q Revenue $1,932M $1,531M Up 26% $1,786M Up 8% Gross Margin $848M $621M Up $227M $818M Up $30M Gross Margin % 44% 41% Up 3pp 46% Down 2pp Operating Expenses $675M $562M Up $113M $641M Up $34M Operating Expense/Revenue % 35% 37% Down 2pp 36% Do
Slide 14: Q2 2020 Summary P&L – Non-GAAP
Q2 2020 SUMMARY P&L – NON-GAAP¹ Q2 2020 Q2 2019 Y/Y Q1 2020 Q/Q Revenue $1,932M $1,531M Up 26% $1,786M Up 8% Gross Margin $850M $623M Up $227M $820M Up $30M Gross Margin % 44% 41% Up 3pp 46% Down 2pp Operating Expenses $617M $512M Up $105M $584M Up $33M Operating Expense/Revenue % 32% 33% Down 1pp 3
Slide 15: Q2 2020 Segment Results
Q2 2020 SEGMENT RESULTS Q2 2020 Q2 2019 Y/Y Q1 2020 Q/Q Computing and Graphics Net Revenue $1,367M $940M Up 45% $1,438M Down 5% Operating Income $200M $22M Up $178M $262M Down $62M Enterprise, Embedded and Semi- Custom Net Revenue $565M $591M Down 4% $348M Up 62% Operating Income (Loss) $33M $89M Do
Slide 16: Q2 2020 Summary Balance Sheet Items
Q2 2020 SUMMARY BALANCE SHEET ITEMS Q2 2020 Q2 2019 Y/Y Q1 2020 Q/Q Cash, Cash Equivalents & Marketable $1,775M $1,128M Up $647M $1,385M Up $390M Securities Accounts Receivable, Net $1,789M $1,333M Up $456M $1,691M Up $98M Inventories $1,324M $1,015M Up $309M $1,056M Up $268M Total Debt (principal a
Slide 17: Total Cash Balance ($ in Millions)
TOTAL CASH BALANCE¹ ($ IN MILLIONS) $1,775 $1,503 $1,385 $1,194 $1,209 $1,156 $1,128 $1,056 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 SOLID NET CASH POSITION 17 SECOND QUARTER 2020 FINANCIAL RESULTS | JULY 28, 2020 1. Cash, cash equivalents and marketable securities
Slide 18: Q3 2020 and FY 2020 Financial Outlook – Non-GAAP
Q3 2020 AND FY 2020 FINANCIAL OUTLOOK – NON-GAAP¹ Q3 2020 FY 2020 ~$2.55 Billion Revenue Growth of ~32% y/y +/- $100 Million Gross Margin % ~44% ~45% Operating Expenses ~$660M ~29% Operating Expenses/Revenue % Interest Expense, Taxes and Other ~$25 Million -- Taxes -- ~3% of pre-tax income Diluted S
Slide 19: Q2 2020 Summary
Q2 2020 SUMMARY Quarterly Revenue Growth Driven by Continued Y/Y Significant Y/Y Increased 26% Y/Y Ryzen and EPYC Gross Margin Profitability and Processor Sales Expansion EPS Growth 19 SECOND QUARTER 2020 FINANCIAL RESULTS | JULY 28, 2020
Slide 20: Building the Best
BUILDING THE BEST Leadership Execution Sustained Market Strong Roadmaps Excellence Share Gains Financial Returns 20 SECOND QUARTER 2020 FINANCIAL RESULTS | JULY 28, 2020
Slide 21: Appendices: Reconciliation of GAAP to Non-GAAP Gross Margin and Operating Expenses
APPENDICES Reconciliation of GAAP to Non-GAAP Gross Margin (Millions) Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 GAAP gross margin $ 661 $ 537 $ 521 $ 621 $ 777 $ 949 $ 818 $ 848 GAAP gross margin % 40% 38% 41% 41% 43% 45% 46% 44% Impairment of technology licenses – 45 – – – – – – Stock-based c
Slide 22: Appendices: Reconciliation of GAAP Operating Income to Non-GAAP
APPENDICES Reconciliation of GAAP Operating Income to Non-GAAP Operating Income (Millions) Q2'20 Q2'19 Q1'20 GAAP operating income $ 173 $ 59 $ 177 GAAP operating margin % 9% 4% 10% Stock-based compensation 60 45 59 Loss contingency on legal matter – 7 – Non-GAAP operating income $ 233 $ 111 $ 236 N
Slide 23: 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) Q3’18 Q4’18 Q1’19 Q2’19 Q3’19 Q4’19 Q1’20 Q2’20 GAAP net income / earnings per share $ 102 $ 0.09 $ 38 $ 0.04 $ 16 $ 0.01 $ 35 $ 0.03 $ 120 $ 0.11 $ 170 $ 0.15 $ 162 $ 0.14 $ 157 $ 0.13 Lo
Slide 24: Appendices: Share Count Overview
APPENDICES Share Count Overview (1) Q1'20 Q2'20 Q3'20 2020 Shares (millions) Actual Actual Estimate Estimate Basic Shares 1,170 1,174 1,179 1,179 Dilutive impacts from: Employee Equity Grants (2) 23 22 18 18 Diluted Shares (without 2026 Convertible Notes) 1,193 1,196 1,197 1,197 2026 Convertible Not
Slide 25: Appendices: Operating Cash Flow to Free Cash Flow and Total Debt
APPENDICES Reconciliation of Operating Cash Flow to Free Cash Flow (Millions) Q2’20 Operating cash flow $ 243 Purchases of property and equipment (91) Free cash flow $ 152 Total Debt (Net) (Millions) Q2'20 Q2'19 Q1'20 7.50% Senior Notes due 2022 $ 312 $ 312 $ 312 7.00% Senior Notes due 2024 – 176 –
Slide 26: Endnotes, Disclaimers and Attributions
ENDNOTES, DISCLAIMERS AND ATTRIBUTIONS RX-325: Testing done by AMD performance labs 6/1/19, using the Division 2 @ 25x14 Ultra settings. Performance may vary based on use of latest drivers. RX-362: Testing done by AMD performance labs on June 4, 2019. Systems were tested with: Intel(R) Core(TM) i7-5
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