Advanced Micro Devices Inc · NASDAQ:AMD
Advanced Micro Devices — Q3 2020 Earnings Presentation
27 slides from Advanced Micro Devices's earnings presentation, Oct 27, 2020
Slide 1: Third Quarter 2020 Financial Results
THIRD QUARTER 2020 FINANCIAL RESULTS OCTOBER 27, 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, including Radeon™ RX 6000 series GPUs and next generation “Milan” se
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 THIRD QUARTER 2020 FINANCIAL RESULTS | OCTOBER 27, 2020
Slide 4: Our Leadership Technology
OUR LEADERSHIP TECHNOLOGY INDUSTRY-LEADING IP ADVANCED TECHNOLOGY DATA CENTER LEADERSHIP PC/GAMING SOLUTIONS Delivering Multi-generational Leadership Process, Innovation in Cloud, Driving Leadership Leadership CPU and GPU Packaging and Interconnect Enterprise and PC Experiences Roadmaps Technology A
Slide 5: Our Best Ever Product Portfolio
OUR BEST EVER PRODUCT PORTFOLIO World’s Fastest Gaming Leadership Ultrathin and Unmatched High-end Desktop Performance & Power Efficiency Up to 64 “Zen 2” Cores with Processors Gaming Notebook Processors with up to 64 “Zen 2” Cores with RDNA Architecture up to 50% Lower TCO PERFORMANCE LEADERSHIP FR
Slide 6: Financial Summary Q3 2020
FINANCIAL SUMMARY Q3 2020¹ Quarterly Revenue ($B) ▪ Revenue of $2.80 billion, up 56% y/y and 45% q/q ‒ Growth driven by higher revenue in both the Enterprise, Embedded and Semi-Custom and Computing and Graphics segments +56% y/y ▪ Gross margin of 44% $2.80 ‒ Up 1 percentage point y/y driven by EPYCT
Slide 7: Computing and Graphics Segment Q3 2020
COMPUTING AND GRAPHICS SEGMENT Q3 2020 ▪ Revenue of $1.67 billion ‒ Up 31% y/y driven by a significant increase in Ryzen processor sales partially offset by lower graphics revenue ‒ Up 22% q/q driven by a significant increase in Ryzen processor sales and an increase in graphics revenue ▪ Average Sel
Slide 8: Enterprise, Embedded and Semi-Custom Segment Q3 2020
ENTERPRISE, EMBEDDED AND SEMI-CUSTOM SEGMENT Q3 2020 ▪ Revenue of $1.13 billion ‒ Up 116% y/y and 101% q/q due to higher semi-custom product sales and increased EPYC processor sales ▪ Operating income of $141 million ‒ Up $80 million y/y and $108 million q/q primarily driven by higher revenue ▪ Stra
Slide 9: Revenue Trend ($ in Millions)
REVENUE TREND ($ IN MILLIONS) 3000 +56% y/y 2800 $2,801 2600 2400 2200 2000 $2,127 1800 $1,932 $1,801 $1,786 1600 1400 $1,531 $1,419 1200 $1,272 1000 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 SIGNIFICANT Y/Y REVENUE GROWTH 9 THIRD QUARTER 2020 FINANCIAL RESULTS | OCTOBER 27, 2020
Slide 10: Gross Margin Trend (GAAP and Non-GAAP)
GROSS MARGIN TREND (GAAP AND NON-GAAP)¹ +1pp y/y 41% 45% 46% 43% 44% 44% 41% 41% 38% 2 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 CONTINUED Y/Y MARGIN EXPANSION 1. See Appendices for GAAP to Non-GAAP reconciliation 2. Gross margin for both GAAP and Non-GAAP are the same for all periods except a
Slide 11: Earnings Per Share Trend (GAAP)
EARNINGS PER SHARE TREND (GAAP) +$0.21 y/y $0.32 Axis Axis Title $0.15 $0.14 $0.13 $0.11 $0.04 $0.03 $0.01 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 EPS MORE THAN DOUBLED Y/Y AND Q/Q 11 THIRD QUARTER 2020 FINANCIAL RESULTS | OCTOBER 27, 2020
Slide 12: Earnings Per Share Trend (Non-GAAP)
EARNINGS PER SHARE TREND (NON-GAAP)¹ +$0.23 y/y $0.41 $0.32 $0.18 $0.18 $0.18 $0.08 $0.08 $0.06 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 EPS MORE THAN DOUBLED Y/Y AND Q/Q 12 THIRD QUARTER 2020 FINANCIAL RESULTS | OCTOBER 27, 2020 1. See Appendices for GAAP to Non-GAAP reconciliation
Slide 13: Q3 2020 Summary P&L – GAAP
Q3 2020 SUMMARY P&L – GAAP Q3 2020 Q3 2019 Y/Y Q2 2020 Q/Q Revenue $2,801M $1,801M Up 56% $1,932M Up 45% Gross Profit $1,230M $777M Up 58% $848M Up 45% Gross Margin % 44% 43% Up 1pp 44% Flat Operating Expenses $781M $591M Up 32% $675M Up 16% Operating Expense/Revenue % 28% 33% Down 5pp 35% Down 7pp
Slide 14: Q3 2020 Summary P&L – Non-GAAP
Q3 2020 SUMMARY P&L – NON-GAAP¹ Q3 2020 Q3 2019 Y/Y Q2 2020 Q/Q Revenue $2,801M $1,801M Up 56% $1,932M Up 45% Gross Profit $1,231M $779M Up 58% $850M Up 45% Gross Margin % 44% 43% Up 1pp 44% Flat Operating Expenses $706M $539M Up 31% $617M Up 14% Operating Expense/Revenue % 25% 30% Down 5pp 32% Down
Slide 15: Q3 2020 Segment Results
Q3 2020 SEGMENT RESULTS Q3 2020 Q3 2019 Y/Y Q2 2020 Q/Q Computing and Graphics Net Revenue $1,667M $1,276M Up 31% $1,367M Up 22% Operating Income $384M $179M Up 115% $200M Up 92% Enterprise, Embedded and Semi-Custom Net Revenue $1,134M $525M Up 116% $565M Up 101% Operating Income (Loss) $141M $61M U
Slide 16: Q3 2020 Summary Balance Sheet Items
Q3 2020 SUMMARY BALANCE SHEET ITEMS Q3 2020 Q3 2019 Y/Y Q2 2020 Q/Q Cash, Cash Equivalents and $1,771M $1,209M Up $562M $1,775M Down $4M Short-term Investments Accounts Receivable, Net $2,134M $1,393M Up $741M $1,789M Up $345M Inventories $1,292M $1,040M Up $252M $1,324M Down $32M Total Debt (princi
Slide 17: Total Cash Balance ($ in Millions)
TOTAL CASH BALANCE¹ ($ IN MILLIONS) $1,775 $1,771 $1,503 $1,385 $1,194 $1,209 $1,156 $1,128 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 SOLID NET CASH POSITION 17 THIRD QUARTER 2020 FINANCIAL RESULTS | OCTOBER 27, 2020 1. Includes cash, cash equivalents, marketable securities and short-term inve
Slide 18: Q4 2020 and FY 2020 Financial Outlook – Non-GAAP
Q4 2020 AND FY 2020 FINANCIAL OUTLOOK – NON-GAAP¹ Q4 2020 FY 2020 ~$3.0 Billion Revenue Growth of ~41% y/y +/- $100 Million Gross Margin % ~45% ~45% Operating Expenses ~$750 Million ~28% Operating Expenses/Revenue % Interest Expense, Taxes and Other ~$30 Million -- Taxes -- ~3% of pre-tax income Dil
Slide 19: Q3 2020 Execution
Q3 2020 EXECUTION Strong Record Growth Driven by Continued Y/Y Profitability & EPS Quarterly Revenue Ryzen, EPYC and Gross Margin More than Doubled Increased 56% Y/Y Semi-Custom Expansion Y/Y and Q/Q 19 THIRD QUARTER 2020 FINANCIAL RESULTS | OCTOBER 27, 2020
Slide 20: Building the Best
BUILDING THE BEST Leadership Execution Sustained Market Strong Roadmaps Excellence Share Gains Financial Returns 20 THIRD QUARTER 2020 FINANCIAL RESULTS | OCTOBER 27, 2020
Slide 21: Reconciliation of GAAP to Non-GAAP Gross Profit and Operating Expenses
APPENDICES Reconciliation of GAAP to Non-GAAP Gross Profit and Gross Margin (Millions) Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 GAAP gross profit $ 537 $ 521 $ 621 $ 777 $ 949 $ 818 $ 848 $ 1,230 GAAP gross margin % 38% 41% 41% 43% 45% 46% 44% 44% Impairment of technology licenses 45 – – – –
Slide 22: Reconciliation of GAAP to Non-GAAP Operating Income
APPENDICES Reconciliation of GAAP Operating Income to Non-GAAP Operating Income (Millions) Q3'20 Q3'19 Q2'20 GAAP operating income $ 449 $ 186 $ 173 GAAP operating margin % 16% 10% 9% Stock-based compensation 76 54 60 Non-GAAP operating income $ 525 $ 240 $ 233 Non-GAAP operating margin % 19% 13% 12
Slide 23: 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) Q4’18 Q1’19 Q2’19 Q3’19 Q4’19 Q1’20 Q2’20 Q3’20 GAAP net income / earnings per share $ 38 $ 0.04 $ 16 $ 0.01 $ 35 $ 0.03 $ 120 $ 0.11 $ 170 $ 0.15 $ 162 $ 0.14 $ 157 $ 0.13 $ 390 $ 0.32 Lo
Slide 24: Share Count Overview
APPENDICES Share Count Overview (1) Q1'20 Q2'20 Q3’20 Q4’20 2020 Shares (millions) Actual Actual Actual Estimate Estimate Basic Shares 1,170 1,174 1,184 1,203 1,183 Dilutive impacts from: Employee Equity Grants (2) 23 22 20 17 20 Diluted Shares (without 2026 Convertible Notes) 1,193 1,196 1,204 1,22
Slide 25: Free Cash Flow Reconciliation and Total Debt
APPENDICES Reconciliation of Operating Cash Flow to Free Cash Flow (Millions) Q3’20 Operating cash flow $ 339 Purchases of property and equipment (74) Free cash flow $ 265 Total Debt (Net) (Millions) Q3'20 Q3'19 Q2'20 7.50% Senior Notes due 2022 $ 312 $ 312 $ 312 7.00% Senior Notes due 2024 – 96 – 2
Slide 26: Endnotes
ENDNOTES R5K-002: Testing by AMD performance labs as of 9/2/2020 based on the average FPS of 40 PC games at 1920x1080 with the High image quality preset using an AMD Ryzen™ 9 5900X processor vs. Core i9-10900K. Results may vary. R5K-002 RM3-127: Ultrathin laptop processor"" defined as 15W typical TD
Slide 27: 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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