Advanced Micro Devices Inc · NASDAQ:AMD
Advanced Micro Devices — FY2019 Earnings Presentation
31 slides from Advanced Micro Devices's earnings presentation, Jan 28, 2020
Slide 1: Fourth Quarter and Full Year 2019 Financial Results
FOURTH QUARTER AND FULL YEAR 2019 FINANCIAL RESULTS JANUARY 28, 2020 1 | AMD Q4 & FY 2019 FINANCIAL RESULTS | JANUARY 28, 2020
Slide 2: Cautionary Statement
CAUTIONARY STATEMENT This presentation contains forward-looking statements concerning Advanced Micro Devices, Inc. (AMD) such as AMD’s strategy and focus; the features, functionality, performance, availability, timing and expected benefits of AMD products; AMD’s financial outlook for the first quart
Slide 3: Our Journey
OUR JOURNEY HIGH-PERFORMANCE GREAT AMBITIOUS FOCUSED TECHNOLOGIES PRODUCTS GOALS EXECUTION 3 | AMD Q4 & FY 2019 FINANCIAL RESULTS | JANUARY 28, 2020
Slide 4: Our Strategy and Focus
OUR STRATEGY AND FOCUS GRAPHICS COMPUTE SOLUTIONS Gaming Compute Virtual & Client Infrastructure Semi- Vertical Partnerships & AI Augmented Systems & Cloud Custom Platforms Reality 4 | AMD Q4 & FY 2019 FINANCIAL RESULTS | JANUARY 28, 2020
Slide 5: Financial Accomplishments FY 2019
FINANCIAL ACCOMPLISHMENTS FY 2019 (1) Record revenue of $6.73 billion, up 4% y/y Strong increase in gross margin primarily driven by RyzenTM and EPYCTM products Gross margin of 43% compared to 38% in 2018– highest since 2011 GAAP Gross Margin Non-GAAP gross margin of 43% compared to 39% in 2
Slide 6: Financial Summary Q4 2019
FINANCIAL SUMMARY Q4 2019 (1) Record revenue of $2.13 billion, up 50% y/y and 18% q/q Significantly higher revenue in the Computing and Graphics segment Quarterly Revenue ($B) Enterprise, Embedded and Semi-Custom segment was up y/y, down q/q +50% y/y Gross margin of 45% - highest since Q2 20
Slide 7: Computing and Graphics Segment Q4 2019
COMPUTING AND GRAPHICS SEGMENT Q4 2019 Revenue of $1.66 billion Up 69% y/y and 30% q/q primarily driven by strong sales of Ryzen and Radeon processors Highest quarterly client processor unit shipments in more than 6 years Graphics unit shipments grew by a strong double-digit percentage y/y
Slide 8: Enterprise, Embedded and Semi-Custom Segment Q4 2019
ENTERPRISE, EMBEDDED AND SEMI-CUSTOM SEGMENT Q4 2019 Revenue of $465 million Up 7% y/y driven by higher EPYC processor sales, partially offset by lower semi-custom sales Down 11% q/q due to softer semi-custom sales, partially offset by strong EPYC processor sales Operating income of $45 mill
Slide 9: Revenue Trend
REVENUE TREND ($ IN MILLIONS) +50% y/y $2,127 $1,801 $1,756 $1,647 $1,653 $1,531 $1,419 $1,272 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Record quarterly revenue 9 | AMD Q4 & FY 2019 FINANCIAL RESULTS | JANUARY 28, 2020
Slide 10: Gross Margin Trend
GROSS MARGIN TREND (AS A PERCENTAGE OF REVENUE, GAAP AND NON-GAAP)(1) +7pp y/y GAAP +4pp y/y Non-GAAP 41% 45% 43% 40% 41% 41% 37% 38% 36% (2) Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Highest quarterly gross margin since Q2 2012 1. See Appendices for GAAP to Non-GAAP reconciliation 2. Gross ma
Slide 11: Earnings Per Share Trend (GAAP)
EARNINGS PER SHARE TREND (GAAP) +$0.11 y/y $0.15 $0.11 $0.11 $0.08 $0.09 $0.04 $0.01 $0.03 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Highest earnings per share since Q1 2011 11 | AMD Q4 & FY 2019 FINANCIAL RESULTS | JANUARY 28, 2020
Slide 12: Earnings Per Share Trend (Non-GAAP)
EARNINGS PER SHARE TREND (NON-GAAP)(1) +$0.24 y/y $0.32 $0.18 $0.14 $0.13 $0.11 $0.08 $0.08 $0.06 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Strong growth in earnings per share in 2019 1. See Appendices for GAAP to Non-GAAP reconciliation 12 | AMD Q4 & FY 2019 FINANCIAL RESULTS | JANUARY 28, 20
Slide 13: 2019 Annual Summary P&L – GAAP
2019 ANNUAL SUMMARY P&L – GAAP 2019 2018 Y/Y Revenue $6,731M $6,475M Up 4% Gross Margin $2,868M $2,447M Up 17% Gross Margin % 43% 38% Up 5pp Operating Expenses $2,297M $1,996M Up 15% Operating Expense/Revenue % 34% 31% Up 3pp Operating Income $631M $451M Up 40% Net Income $341M $337M Up 1% Earnings
Slide 14: 2019 Annual Summary P&L – Non-GAAP
2019 ANNUAL SUMMARY P&L – NON-GAAP(1) 2019 2018 Y/Y Revenue $6,731M $6,475M Up 4% Gross Margin $2,874M $2,496M Up 15% Gross Margin % 43% 39% Up 4pp Operating Expenses $2,094M $1,863M Up 12% Operating Expense/Revenue % 31% 29% Up 2pp Operating Income $840M $633M Up 33% Net Income $756M $514M Up 47% E
Slide 15: Q4 2019 Summary P&L – GAAP
Q4 2019 SUMMARY P&L – GAAP Q4 2019 Q4 2018 Y/Y Q3 2019 Q/Q Revenue $2,127M $1,419M Up 50% $1,801M Up 18% Gross Margin $949M $537M Up 77% $777M Up 22% Gross Margin % 45% 38% Up 7pp 43% Up 2pp Operating Expenses $601M $509M Up 18% $591M Up 2% Operating Expense/Revenue % 28% 36% Down 8pp 33% Down 5pp O
Slide 16: Q4 2019 Summary P&L – Non-GAAP
Q4 2019 SUMMARY P&L – NON-GAAP(1) Q4 2019 Q4 2018 Y/Y Q3 2019 Q/Q Revenue $2,127M $1,419M Up 50% $1,801M Up 18% Gross Margin $950M $583M Up 63% $779M Up 22% Gross Margin % 45% 41% Up 4pp 43% Up 2pp Operating Expenses $545M $474M Up 15% $539M Up 1% Operating Expense/Revenue % 26% 33% Down 7pp 30% Dow
Slide 17: Q4 and FY 2019 Segment Results
Q4 AND FY 2019 SEGMENT RESULTS Q4 2019 Q4 2018 Y/Y Q3 2019 Q/Q 2019 2018 Y/Y Computing and Graphics Net Revenue $1,662M $986M Up 69% $1,276M Up 30% $4,709M $4,125M Up 14% Operating Income $360M $115M Up 213% $179M Up 101% $577M $470M Up 23% Enterprise, Embedded and Semi-Custom Net Revenue $465M $433
Slide 18: Q4 and FY 2019 Summary Balance Sheet Items
Q4 AND FY 2019 SUMMARY BALANCE SHEET ITEMS Q4 2019 Q4 2018 Y/Y Q3 2019 Q/Q Cash, Cash Equivalents & $1,503M $1,156M Up 30% $1,209M Up 24% Marketable Securities Accounts Receivable, Net $1,859M $1,235M Up 51% $1,393M Up 33% Inventories, Net $982M $845M Up 16% $1,040M Down 6% Total Debt (principal amo
Slide 19: Total Cash Balance
TOTAL CASH BALANCE(1) ($ IN MILLIONS) $1,503 $1,194 $1,209 $1,156 $1,128 $1,045 $1,056 $983 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Highest net cash position since Q3 2006 1. Cash, cash equivalents and marketable securities 19 | AMD Q4 & FY 2019 FINANCIAL RESULTS | JANUARY 28, 2020
Slide 20: 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 $1,686 $1,685 TTM Adjusted EBITDA $1,588 $1,528 Leverage Ratio 3.4x $1,363 $1,293 $1,087 $1,062 2.5x 2.2x $709 1.9x$803 1.8x$737 1.9x $745 $666 $672 1.5x $5
Slide 21: Q1 2020 and FY 2020 Financial Outlook – Non-GAAP
Q1 2020 AND FY 2020 FINANCIAL OUTLOOK – NON-GAAP(1) Q1 2020 FY 2020 ~$1.8 Billion Revenue Growth of ~28% – 30% +/- $50 Million Gross Margin % ~46% ~45% Operating Expenses $580M ~28% Operating Expenses/Revenue % Interest Expense, Taxes and Other ~$18 Million -- Taxes -- ~3% of pre-tax income Diluted
Slide 22: Q4 2019 Summary
Q4 2019 SUMMARY RECORD QUARTERLY GROWTH DRIVEN BY STRONG Y/Y SIGNIFICANT REVENUE INCREASED RYZEN, EPYC AND GROSS MARGIN OPERATING AND NET 50% Y/Y AND 18% Q/Q RADEON SALES EXPANSION INCOME GROWTH 22 | AMD Q4 & FY 2019 FINANCIAL RESULTS | JANUARY 28, 2020
Slide 23: 2019 Summary
2019 SUMMARY RECORD ANNUAL STRONGEST PRODUCT STRONG Y/Y GROSS STRENGTHENED REVENUE OF $6.7B PORTFOLIO IN OUR MARGIN EXPANSION BALANCE SHEET AND 50 YEAR HISTORY REDUCED ~$1B OF DEBT 23 | AMD Q4 & FY 2019 FINANCIAL RESULTS | JANUARY 28, 2020
Slide 24: 24 | AMD Q4 & FY 2019 FINANCIAL RESULTS | JANUARY 28, 2020
24 | AMD Q4 & FY 2019 FINANCIAL RESULTS | JANUARY 28, 2020
Slide 25: Appendices: GAAP to Non-GAAP Gross Margin and Operating Expenses
APPENDICES Reconciliation of GAAP to Non-GAAP Gross Margin (Millions) Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 2018 2019 GAAP gross margin $ 597 $ 652 $ 661 $ 537 $ 521 $ 621 $ 777 $ 949 $ 2,447 $ 2,868 GAAP gross margin % 36% 37% 40% 38% 41% 41% 43% 45% 38% 43% Impairment of technology licen
Slide 26: Appendices: Operating Income and Adjusted EBITDA Reconciliation
APPENDICES Reconciliation of GAAP Operating Income to Non-GAAP Operating Income (Millions) Q4'19 Q4'18 Q3'19 2019 2018 GAAP operating income $ 348 $ 28 $ 186 $ 631 $ 451 Impairment of technology licenses — 45 — — 45 Stock-based compensation 57 36 54 197 137 Loss contingency on legal matter $ — $ — $
Slide 27: Appendices: Net Income and EPS Reconciliation (Quarterly)
APPENDICES Reconciliation of GAAP to Non-GAAP Net Income / Earnings Per Share (Millions, except per share data) Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 GAAP net income / earnings per share $ 81 $ 0.08 $ 116 $ 0.11 $ 102 0.09 $ 38 $ 0.04 $ 16 $ 0.01 $ 35 $ 0.03 $ 120 $ 0.11 $ 170 $ 0.15 Loss
Slide 28: Appendices: Net Income and EPS Reconciliation (Annual)
APPENDICES Reconciliation of GAAP to Non-GAAP Net Income / Earnings Per Share (Millions, except per share data) 2018 2019 GAAP net income / earnings per share $ 337 $ 0.32 $ 341 $ 0.30 Loss on debt redemption/conversion 12 0.01 176 0.15 Non-cash interest expense related to convertible debt 24 0.02 2
Slide 29: Appendices: Share Count Overview
APPENDICES Share Count Overview Shares (millions) (1) Q3'19 Q4'19 2019 Q1'20 2020 Actual Actual Actual Estimate Estimate Basic Shares 1,097 1,140 1,091 1,170 1,175 Dilutive impacts from: Employee Equity Grants (2) 20 17 22 17 15 75 million share Warrant (3) — — 7 — — Diluted Shares (without 2026 Con
Slide 30: Appendices: Total Debt (Net)
APPENDICES Total Debt (Net) (Millions) Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 6.75% Senior Notes due 2019 $ 153 $ 153 $ 66 $ 66 $ — $ — $ — $ — 7.50% Senior Notes due 2022 347 347 337 337 312 312 312 312 7.00% Senior Notes due 2024 311 310 310 250 176 176 96 — 2.125% Convertible Senior Note
Slide 31: Disclaimers and Attributions
DISCLAIMERS AND ATTRIBUTIONS The information contained herein is for informational purposes only, and is subject to change without notice. Timelines, roadmaps, and/or product release dates shown in these slides are plans only and subject to change. While every precaution has been taken in the prepar
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